Steve Keen - The New Economics

4 Chapter 6 Figure 6.1.Simple population growth as an integral equation in Minsky . See http://ww...

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Steve Keen

polity

Copyright © Steve Keen 2022

The right of Steve Keen to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2022 by Polity Press

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ISBN-13: 978-1-5095-4528-5

ISBN-13: 978-1-5095-4529-2 (pb)

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2.1.Money enables the butter maker to buy a gun without the gun maker having to want butter

2.2.The State as the conduit for fiat money transfers where money is the State’s liability and physical gold its asset

2.3.Modelling the initiation of a monetary economy in Minsky

2.4.Growth of coins and the economy from an initial minting of 1,000 coins

2.5. The fundamental monetary operations of the government

2.6. US government debt and deficits over the past 120 years

2.7. US unemployment and inflation 1960–1990

2.8. The relationship between credit and unemployment

2.9. Private debt and credit in the USA since 1834

2.10. The banking sector’s view of a mixed fiat-credit economy

2.11. An integrated view of government deficits and private sector credit

2.12. Margin debt and the stock market’s cyclically-adjusted price-to-earnings ratio (CAPE) since 1910

2.13. Accounting for a Modern Debt Jubilee

2.14. Change in household credit and change in house prices (correlation 0.64)

3.1. The cyclical interaction of grass and cows

3.2. A predator-prey model in Minsky , using sharks and fish

3.3. Lorenz’s model of aperiodic cycles in the weather

3.4. The Keen-Minsky model and the ‘intermittent route to chaos’

3.5. Declining cycles in employment and inflation, while private debt rises

4.1. The basic principle of a heat engine: Work can be done if T H> T C

4.2. The correlation between change in global energy consumption and change in global GDP is 0.83

4.3. A simple energy-based model with resource depletion and waste production

4.4. Estimates of the total impact of climate change plotted against the assumed climate change

6.1. Simple population growth as an integral equation in Minsky

2.1. Economic performance of major periods in post-Second World War USA

2.2. A Moore Table showing expenditure IS income for a three-sector economy

2.3. The Moore Table for Loanable Funds

2.4. The Moore Table for bank-originated money and debt

2.5. Magnitude of credit and duration of negative credit in the USA’s major economic crises

4.1. Extract from Nordhaus’s table 5: breakdown of economic activity by vulnerability to climatic change in 1991 US$ terms

Dedicated to my wife Nisa, whose Buddhist grounding in the present keeps me sane as I contemplate the future facing both humanity, and the biosphere that humanity has so severely damaged .

Even before the Covid-19 crisis began, the global economy was not in good shape, and neither was economic theory. The biggest economic crisis since the Great Depression began late in the first decade of the twenty-first century. Called the ‘Global Financial Crisis’ (GFC) in most of the world, and the ‘Great Recession’ in the United States, it saw unemployment explode from 4.6 per cent of the US workforce in early 2007 to 10 per cent in late 2009. The S&P500 stock market index, which had boomed from under 800 points in 2002 to over 1,500 in mid-2007, crashed to under 750 by early 2009. Inflation of 5.6 per cent in mid-2008 turned into deflation of 2 per cent in mid-2009.