Documentary Of The Week: Steve Keen Keynote Speech “Finance And Society”

Modeling Differences:  Loanable Funds vs. Endogenous Money

Econintersect:  This lecture, delivered 26 June 2013  at the First International Conference on Finance & Society at the Kedge Business School in Bordeaux, France “Rethinking Financial and Economic Models for a Post-Crisis Era”.  This shows demonstrates how many confuse accounting identities (which are statements of momentary status) with flows (the integration across a range of statements of momentary status).  The lecture draws on graphical representations by the Minsky Modeling Program at the earlier stage of development as it existed almost a year ago.

Chart presented near end of the video – after the Read more >> jump.

At the end of this lecture Keen explains why his analysis indicates the deleveraging from the excessive private debt that led to the Great Financial Crisis will take up toanother 20 years.  His last statement will be astounding to many:

“Japan can survive a deleveraging of this sort but I don’t think America or Europe can.”

The bug and the windshield that Steve Keen fears does not involve Japan but the U.S. and the EU.

The charts in the presentation display most clearly if the video is expanded to full screen.