Podcasts about Debunking Economics

Economy 2.0, which launched November 12 in collaboration with The Silvio Gesell Foundation, is a monthly series that investigates these pressing questions. Each episode will feature thought leaders, economists, and forward-thinking experts sharing their perspectives on the future of the global economy and the path forward.   In the inaugural episode, host Josh Sidman will sit down with Prof. Steve Keen to explore what a post-status quo world might look like. Dr. Keen received his bachelor's degree from the University of Sydney and went on to complete his master's and Ph.D. in Economics and Economic History from the University of New South Wales. He is the author of several books on economics, of which the two most famous are Debunking Economics and The New Economics: A Manifesto. Both critique conventional economic theory. Dr. Keen has taught at the University of Western Sydney and Kingston University in London. He is currently leading the development of a software package called Minsky, a dynamics-based visualization tool for macroeconomic modeling. Together, we discussed why money should be considered multidimensional, why housing prices continue to skyrocket, and how a parallel currency of carbon credits could reduce overconsumption. 

Rethinking Economics is all about questioning the core foundations of economics. This series questions economic orthodoxy to better understand the forces and shifts shaping our society and the world. Together, we'll interrogate things like the efficacy of economic models, if mainstream assumptions are always correct, and why the ideas and concepts you learn about in textbooks may lead you astray. For our inaugural discussion of the series, we will be talking to our returning guest, and one of my favorite economists, Dr. Steve Keen. Our talk was recorded in March of 2024, and is hosted by me, Nathan Greene, a researcher here at the Henry George School. Many people, including myself, don't fully understand monetary theory or monetary economics. Admittedly, it's quite confusing. There are a lot of dynamics at play from banks, to households, money, and central banks, just to name a few. If you ever learned the terms money multiplier, monetary base, or reserve requirement ratio, but are not really sure what it means, you're not alone.  Dr. Keen is an expert on the dynamics of monetary economics and macroeconomics. We'll explore his critiques of the efficient market hypothesis to his more recent analyses of debt dynamics and financial instability. Together, we talked about the shortcomings of conventional economic thinking, and why it's so damaging not just to the economy, but the planet as well. By questioning fundamental assumptions, he invites us to reconsider our approach to economic policy and reshape our vision of a more equitable and sustainable future. At a time when the world is largely ignoring calls to abandon fossil fuels and the green transition feels painstakingly slow, his ideas and critiques feel more important now than ever before.  Dr. Keen received his bachelor's degree from the University of Sydney and went on to complete his master's and Ph.D. in Economics and Economic History from the University of New South Wales. He is the author of several books on economics, of which the two most famous are "Debunking Economics" and "The New Economics: A Manifesto." Both critique conventional economic theory. We were even lucky enough to hear about his upcoming book, "Rebuilding Economics from the Top Down." Dr. Keen has taught at the University of Western Sydney and Kingston University in London. He is currently leading the development of a software package called Minsky, a dynamics-based visualization tool for macroeconomic modeling. To check out more of our content, including our research and policy tools, visit our website: https://www.hgsss.org/ --- Support this podcast: https://podcasters.spotify.com/pod/show/smart-talk-hgsss/support

On this episode, economist Steve Keen offers a deep forensic history of why modern economic theory has neglected the role of energy in productivity - and why this “Energy Blindness” is now a major blindspot in how our culture views the present - and the future.  The massive, temporary carbon surplus we've extracted over the last few centuries has resulted in an exponential increase in the standard of living for many. This explosion of global economic growth also happened to coincide with the development of all modern economic theories and formulas, leading to a core misunderstanding in the way our economies are powered. How have technology and innovation been used to cover up the role of a growing energy supply in the last century of rising prosperity? In the midst of discussions between value and labor, where does energy really fit into the equation? Where do we go once we understand the true role of energy in our economy - and will we have the ability to reshape economic policies to be in line with our energy realities? About Steve Keen Steve Keen is an economist, author of Debunking Economics and The New Economics: A Manifesto. His new book, Rebuilding Economics from the Top Down, will be released in 2024. He is a Research Fellow at the Institute for Strategy, Resilience, and Security at University College in London. Steve was one of the handful of economists to realize that a serious economic crisis was imminent, and to publicly warn of it from as early as December 2005. This, and his pioneering work on modeling debt-deflation, resulted in him winning the Revere Award from the Real World Economics Review. Watch on YouTube: https://youtu.be/lrMWSkzrMYg Show notes, and more info: https://www.thegreatsimplification.com/episode/108-steve-keen 

Steve Keen joins Bob to commiserate on the poverty of Paul Krugman, and to make the case for Hyman Minksy. An all around fun, informative conversation.Mentioned in the Episode and Other Links of Interest:The YouTube version of this interview.Steve Keen's substack and Patreon.Steve Keen's Debunking Economics podcast.Gene Callahan and Bob Murphy review of Keen's Debunking Economics.Bob's article on Paul Samuelson's "A Summing Up" (from the Cambridge Capital Controversy).Bob's article on Eugene Fama on the housing bubble.Bob's critique of Nordhaus' DICE model.Help support the Bob Murphy Show.

On this Reality Roundtable, Nate is joined by Jon Erickson, Josh Farley, Steve Keen, and Kate Raworth - all of whom are leading thinkers and educators in the field of heterodox economics. In this lively discussion, each guest begins by sharing one fundamental aspect of what conventional economics gets wrong and how it could be improved in our education system. What basic assumptions about humans have led to a misunderstanding of the average person's decision-making? What areas has economics turned a blindspot to as the foundation of our economic systems? Who is finding the models and systems that economists have created useful - and how does economics as a discipline need to change in the face of a lower energy future? In short, what we teach our 18-22 year olds around the world matters - a great deal. About Jon Erickson Jon Erickson is the David Blittersdorf Professor of Sustainability Science & Policy at the University of Vermont. He has published widely on energy and climate change policy, land conservation, watershed planning, environmental public health, and the theory and practice of ecological economics.  He advised presidential candidate Bernie Sanders on economics and energy issues. About Josh Farley Joshua Farley is an ecological economist and Professor in Community Development & Applied Economics and Public Administration at the University of Vermont. He is the President of the International Society for Ecological Economics.  About Steve Keen Steve Keen is an economist, author of Debunking Economics and The New Economics: A Manifesto. He is a Research Fellow at the Institute for Strategy, Resilience, and Security at University College in London. About Kate Raworth Kate Raworth describes herself as a renegade economist focused on making economics fit for 21st century realities. She is the creator of the Doughnut of social and planetary boundaries, and co-founder of Doughnut Economics Action Lab, based on her best-selling book Doughnut Economics: 7 Ways to Think Like a 21st Century Economist. Kate is a Senior Associate at Oxford University's Environmental Change Institute, where she teaches on the Masters in Environmental Change and Management. She is also Professor of Practice at Amsterdam University of Applied Sciences. She is a member of the Club of Rome and currently serves on the World Health Organisation Council on the Economics of Health for All.  For Show Notes and More visit: https://www.thegreatsimplification.com/episode/rr03-erickson-farley-raworth-keen  To watch this video episode on YouTube: https://youtu.be/EC11UQD9q3w  

Welcome to episode 140 of Activist #MMT. Today I talk with Scott Fullwiler on his 2008 paper, Modern Central Bank Operations: The General Principles. Today's part one of a three-part conversation. Today in part one we discuss some generic but related topics, and then principles one and two. Next time in part two we cover principles three to six, and then in part three, principles seven to ten. My full and detailed question and summary list can be found at the bottom of these show notes (look below!). Also, be sure to check out the list of audio chapters to find precisely where each principle, and otherwise, can be found. (Here are links to parts two and three. A list of the audio chapters in this episode can be found right below the resources section in this post.) Today's principles one and two. Principle one is that reserves can only be used for two purposes: Settling payments between banks, and meeting reserve requirements. (There's actually a third purpose, which is it's the only thing that can ultimately settle tax obligations to the state.) Knowing these are its only possible uses, when you hear, for example, that more reserves somehow increase a bank's liquidity, and that this in turn encourages banks to lend more to customers, which then in turn increases economic activity in general… you know they're wrong. The same is true with the reverse: that less reserves somehow discourages lending and reduces economic activity. Principal two says that, because the central bank is the only entity capable of creating and deleting reserves, it has "a fundamental, legal obligation to promote the smooth functioning of the national payment system." Without a functioning payment system, society would, without exaggeration, break down. If a bank can't settle its payments with another bank, then everyone expecting a payment won't receive it, and everyone expecting payment from them also won't receive it. And on and on. Trillions of dollars go through the federal reserve system every day. More goes through this system in the United States each week then an entire year's worth of GDP. Not to mention, the US payment system is central to most of the payments for the entire world, and so the US payment system breaking down would have global implications. (As a brief side note, this latter point is leveraged by the United States to surveil and manipulate most nations around the globe. One example is how, when Iraq threaten to eject all US troops, the US responded by threatening to forbid Iraq from using its payment system, thereby potentially disconnecting it from the entire world. This is the big story that lurks behind the so-called petrodollar. Here is a fascinating video on this by the Wall Street Journal.) And now, onto my conversation with Scott Fullwiler. Enjoy. Resources Daily Treasury statement (original location) 2017 paper by Rohan Grey, Banking in a Digital Fiat Currency Regime 2015 paper by Perry Mehrling, Elasticity and Discipline in the Global Swap Network 2000 paper by Stephanie Bell (now Kelton), Do Taxes and Bonds Finance Government Spending? The updated version of this paper, from 2009, consolidates the original ten principles into around seven, and then adds some more. It's much longer, and is a chapter in the book (as co-edited by Scott) called Institutional Analysis and Praxis: The Social Fabric Matrix Approach. Audio chapters 5:06 - Hellos 6:55 - My boys 8:49 - Our meeting, and Twitter 11:27 - The plan 12:17 - The Federal Reserve and the banks are in charge of the government (not) 16:58 - How do you know what you know? 19:52 - How the paper came to be 23:08 - What would change about your paper if you could write it again? 25:25 - The horizontalists versus structuralists debate (plus circuitists and chartalism) 27:54 - MMT agrees more with horizontalists, but Randy Wray had one unexpected element of agreement with structuralists. 30:34 - Steve Keen's Debunking Economics opens with the false labor supply-demand curve 31:37 - Principle 1: Reserves can only be used for settling payments and meeting reserve requirements. 35:57 - Aside from banks and other central banks what other institutions and entities have reserve accounts? 38:24 - Principle 2: The primary directive of central banks is to preserve the stability of the payment system (which is necessary to have a functioning society) 40:54 - Principle 2 continued: parenting analogy 43:22 - Principle 2 is almost the most important one 44:23 - Relation between fractional reserve banking and money multiplier 47:27 - Principle 3: Outside a floor system, it's impossible for the central bank to target the quantity of reserves. 50:48 - Duplicate of introduction, with no background music (for those with sensitive ears) My full question and summary list I have some questions before we get into the ten principals: Pre-1: First, I'd like to start with a general question mostly unrelated to your paper: A common online theory is that the central bank doesn't answer to the government. Rather, the government answers to the central bank – and according to some, even directly to commercial banks. This means the government must borrow (in the personal sense!) from the CB or banks, which means the national debt and deficit, and bond vigilantes, are indeed a big deal. This also completely undermines MMT. We're going to get into lots of details, but in general, how would you respond to that person? (Assuming they really want to know better.) Is there any instance in history where, when it really came down to it, the central bank didn't do what Congress or Parliament demanded of it? Having a stable society requires a stable payment system, which, under our current institutional set up, only the central bank can do. Is it possible to have a stable society/payment system, and a dollar worth the same on both sides of the country, if the government had to answer to the central bank in that way? Pre-2: Your paper, written in 2008, is called Modern Central Bank Operations: The General Principles. Can you tell the backstory of how the paper came to be, as you briefly mentioned in email? Pre-3: As I understand it, horizontalists and structuralists agree that loans create deposits, but disagree on the how, where, and dwhy the reserves are obtained afterwards. Can you summarize the differences and the debate between the two camps, and also relate it to the chartalist view? Pre-4: How do you know what you know? You interviewed CB employees? Looked at their balance sheets? Just logically it must be true? Pre-5: It's been fourteen years and two major crises since you wrote your paper. How well do the ten principles stand up? If you wrote the paper again today, would there be any major changes? THE PRINCIPLES I'm going to summarize the ten principles in your paper as best I can, and describe some of their implications. Then I'll ask you to correct and elaborate as necessary. I'll also use some of the principles as an excuse to ask a question. PRINCIPLE ONE Reserves only serve two purposes: settling payments and meeting reserve requirements. Regarding the latter, there could be an arbitrary requirement that, for example, a bank must always hold an amount of reserves equal to 10% of the amount it has in deposits (perhaps immediately, or with a lag). In the absence of reserve requirements, the amount of deposits held by a bank is only very distantly related to the amount of reserves banks need to make settlement. This is because a newly created deposit for a newly created loan (or from new government spending): may not be spent right away, may not be spent in its entirety, at least some of it may be spent at (a company that banks at) the same bank. If it is spent at (a company that's a customer of) another bank, it's only one of many transactions taking place between those two banks. The net transactions between those banks may be small, or even in the opposite direction. (A simple example: if I owe you $1000 and you owe me $1050, then the net transaction to settle the whole thing is… you just give me 50 bucks.) Finally, the bank may already have sufficient reserves, or can cheaply borrow them from another bank. So again, the existence or creation of new deposits is only very indirectly related to the need for more reserves. A minor follow up: Banks require reserves to transact with entities other than itself. These other entities include other banks, and the government at all levels. What other institutions/entities require reserves for settlement? Foreign banks and governments? PRINCIPLE TWO As the only institution capable of creating and deleting reserves, the central bank has "a fundamental, legal obligation to promote the smooth functioning of the national payment system." As you say in the paper, "a nation's payment system is at the core of the infrastructure of the modern business world." According to the Federal Reserve's Board of Governors in 1990: "A reliable payments system is crucial to the economic growth and stability of the nation. The smooth functioning of markets for virtually every good and service is dependent upon the smooth functioning of banking in the financial markets, which in turn is dependent upon the integrity of the nation's payment system." The amount of transactions settled each day is enormous. In the US in 2005 it was $2.1 trillion. Today I believe it's closer to $5 trillion. So, a sixth of the annual GDP of the United States, is processed each day by the central bank. Further, this is only a portion of the nation's transactions, because more are directly settled between banks through side agreements and internal systems. The central bank is the only institution that can create reserves, and so, if we are to have a functioning society, it will provide the reserves needed by the banks, because it's the only thing that can settle those transactions. If a bank abuses these privileges (such as, they keep demanding more and more, because they keep committing crimes) then they could be shut down. An analogy is how parents are the only ones capable of providing their children with food. Ultimately, it's provided based on the needs of the children. Parents will provide enough food in order for their children to remain healthy and not dead (and so they don't have to go to jail). It also implies a power struggle, such as when the children whine about being hungry, not out of actual need but as a form of manipulation. Of course, unlike the banks and their central bank, in most normal families, the children haven't paid off their parents. Also unlike banks, a child can't be shut down if they consistently misbehave – unless the parent really wants to go to jail and lose all their children! PRINCIPLE THREE Before I summarize this principle, can you talk about how the money multiplier view and fractional reserve banking are two sides of the same thing? The principle: The money multiplier not only doesn't limit bank lending, it's impossible for the central bank to directly target reserve levels, or the monetary base, at all. It's only possible to directly target the price of that money – the interest rate. The monetary aggregate can only be indirectly targeted, which is inherently unreliable. Even if the central bank could magically manage the levels of reserves, since banks are not reserve constrained, it wouldn't have any direct effect on bank lending anyway. It's impossible for the central bank to control the level of reserves because there are many factors out of its direct control. This includes: fiscal policy (the government spending it's compelled to execute), taxation which is collected through the banking system foreign policy and foreign exchange, the public's desires for cash and coins, loans, and foreign products, calendar factors, such as paychecks at the end of each week and more cash spending on the weekends and vacation national holidays, crises, the trillions in daily transactions which must be settled, and the fact that the central bank doesn't just manage the payment system, it also manages "inflation" and "maximum employment"! As we're about to discuss in principle four, all these activities must be continually offset. Attempting to target specific reserve levels can only serve to degrade its ability to manage these offsets, and so its target rate, and ultimately, the payment system. PRINCIPLE FOUR As in the previous question, the central bank does many things unrelated to interest rate targeting, and many other things happen out in the world that aren't directly in its control. This results in reserve levels moving in an unpredictable fashion, all of which must be offset if the target rate is to be maintained. One of the things out of the central bank's control is government spending. The way the government spends occurs is mind twisting, and understanding it is key to understanding national accounting specifically and modern money in general. The government itself has a checking account at its central bank, which in the United States is called the Treasury's general account, or TGA. This is the account where a number is raised in response to new spending voted on via the passage of a new law. [CORRECTION: As (needlessly!) required by law, the TGA is not raised except after tax and bond revenue is received.] When that money is distributed to someone in the real economy, that same number is lowered once again. This is a very nature of government spending. Here's another example of this mind twisting: When the government sells a bond, it's paid for by the government. The government does this by withdrawing $1000 from its account, the TGA, and handing it to the central bank. So, to pay the bank – it's bank – it withdraws $1000 from that bank and hands it right back to the bank! Further, at some future date, the bank must then pay its profit to its shareholders, which is the government. How do they do this? By putting that money right back into that same government account! (Of course, no money is actually passed around, it's just a number going down there and going up here.) (Also, the government's account can go deeply negative without much real-world consequence, but since negative numbers stress uninformed people out, we cater to (and leverage) that ignorance by making sure it stays positive.) PRINCIPLE FIVE Reserve requirements are related to interest rate targets, not control of monetary aggregates. In one sense, what's having the purpose of having rules at all when it's guaranteed that the rule maker will do whatever it takes to ensure the rule followers always follow the rules? It seems reserve requirements are a tool to buffer against sudden volatility, in the same way that TT&L accounts (as stated on page 607 in Stephanie Kelton's 2000 paper, Do Taxes and Bonds Finance Government Spending?) are used to buffer against volatility from government spending and redemption. These things don't stop the need for offsetting these activities (as in principle four), but it does make it possible to not have to do it at such quick, extreme, and unpredictable levels. In other words, these buffers don't change what the the central bank needs to do but it helps them see it coming. I'm going to ask a mostly unrelated question: Interest rates are for managing the target rate, which is for managing the stability of the payment system, which is for maintaining the stability of the entire nation. Yet, at the same time, the CB is also mandated to manage (some definition of!) inflation, and the only way it knows how to do this is by adjusting interest rates. How can these tasks not conflict? If it's critical to keep interest rates stable (near the target, ideally zero from our MMT points of view), then during the Volcker shock, how could you possibly keep interest rates stable at such a high level? In that situation, it seems that banks simply settling their payments each day would be so expensive, they would have to pass much of that cost onto their customers through higher interest rates. Raising interest rates: increases interest income on new bonds, further enriching the rich raises interbank borrowing costs for banks, which are passed onto its customers. The results in its business customers raising prices for its customers, which is just another way to further lower real wages. Anyone with a variable rate loan, whether the borrower is in or out of the country, suddenly has much greater difficulty paying it off. This includes global south countries colonized by powerful nations, such as via the IMF. PRINCIPLE SIX Volatility in the target rate is only possible between the discount window's penalty rate at a maximum and the interest rate paid on reserves at a minimum. The way you say it in your paper is, "Potential volatility is determined by the width of the corridor." Here's a question about the target rate and its corridor or band (with thanks to Andrew Chirgwin): Let's assume a corridor with a width of .5%. So the minimum, the interest on reserves (IOR), is 1.75%. The target rate is 2%, and the penalty/discount rate is 2.25%. So, they're all different values. If a bank is in need of reserves, it first turns to another bank. It may be a bank it needs to settle with, but maybe not. It may try to get all the reserves from one bank, or maybe a little from several. In order to turn a profit, the banks with excess will make an interest-rate offer to the bank-in-need. That rate will be somewhere within the band. It won't be higher than the penalty rate, because the bank-in-need could just turn to the central bank's discount window and pay less interest. It won't be lower than IOR, because no bank would deliberately choose to lose money (that is, make less from the bank-in-need, than they would from interest paid directly on their reserves). Within this narrow band, banks with excess may compete with one another in an attempt to get the business of the bank-in-need. So, although a bank may offer an interest rate of, say, 2.24%, which is just under the penalty rate, another could easily steal their business by offering 2.20%. The central bank is okay with this competition, because they know the interest rates will remain within the band. What I don't understand is, the CB defends that band so that it remains within the minimum and maximum. So, why is there a precise target at all – and consequently, what's the point of potentially setting it equal to IOR? Clearly I'm missing something, because it's stated at several points in your paper that setting the target rate equal to IOR does make an important difference. How does the central bank defend the precise target rate? A somewhat related thought experiment, which may just be absurd: What would some of the major consequences be if the discount window/penalty rate was set below IOR? (With the target rate between the two.) PRINCIPLE SEVEN In the context of monetary policy, the concept of "liquidity effect" is that extra reserves in the interbank market pushes down interest rates, which then stimulates banks to make more loans, which in turn increases economic activity. In other words, it's the false view that the interest rate is not something the central bank can arbitrarily decide, but rather something it can only control or defend by offsetting the effects of "market forces". Luckily, since the central bank is the largest currency user, it at least has a decent chance of success. (I know that's not what they mean but it's not far off!) Specifically, the "liquidity effect" is the false belief that the only way for the central bank to "choose", or defend, its target rate, is to inject a potentially vast amount of reserves into the banks' balances. This will encourage banks to increase lending, which in turn will increase economic activity. This is called "easing". (QE is just a ridiculous amount of easing.) Removing a large amount, called "tightening", will discourage lending and economic activity. In reality, the target rate is an arbitrary decision (a "policy variable") of the voting members of the central bank. The consolidated government has the infinite capacity to create and delete its own money and to sell and purchase its own bonds. This means it can effectively choose an interest rate for any bond at any maturity. The false "liquidity effect" view also asserts the mere existence of more reserves in a bank's account makes banks suddenly need them; makes them want to use them. It strongly suggests that reserves can be directly lent to customers, or can be used for some purpose beyond settlement (and meeting reserve requirements). If my bank dramatically increased my personal checking account, then sure, that would indeed cause me to pay off my mortgage and probably hire some contractors to do fixes and upgrades to my house that at the moment, we can only dream about. But that's only because, for average people, deposits can be used for almost any purpose. [CORRECTION: Me getting money in my bank account, outside a loan, is net financial asset – a grant. The back being reserved is always an even swap. That's totally different.] Beyond reserve requirements, the only possible use of bank reserves is to settle transactions – transactions that happened at some point in the past. It means the mere existence of more reserves has no direct influence on a bank's behavior. In other words, settlement – and therefore the amount of reserves needed – is endogenous. A bank's demand for reserves is vertical. It's decided on not by the government but by actual people choosing to take out a loan and a bank choosing to give them one A final point: The false idea of the "liquidity effect", that the mere existence of new reserves incentivizes banks to issue more loans, evokes the concept of Say's law. Say's law is the false idea that supply causes demand, as if a new product appearing on a store shelf magically and magnetically attracts a new customer – who didn't even know the product was existed – to want to go to that store and want to purchase that product. (As if consumers are unthinking puppets and businesses their puppeteers!) In reality, demand causes supply. In reality, loans create deposits. Those deposits will at some point likely result in some transactions with another bank, which the bank will need to settle. If they don't have enough in reserves, only then will they request more. PRINCIPLE EIGHT The quantity of reserve balances in circulation is primarily determined by the central bank's method of interest rate management. The only uses for reserves are to settle payments and meet reserve requirements. If there are no reserve requirements, then there's clearly less reasons to hold them. As a simple example, if the central bank chooses to penalize overdrafts severely at the end of each day, then banks will demand much more reserves in order to buffer against that possibility. If there were no reserve requirements, and both IOR and the penalty rate (and the target) were set to zero, then it seems there would be little to no uncertainty for banks. It would be free to purchase reserves from the discount window whenever needed. This seems close to, if not exactly, MMT's ZIRP. If all three were equal but set *above* zero, then banks would make a profit on their reserves, and when in need of more reserves for settlement (again assuming no reserves requirements), they would pay that same rate at the discount window. (There would be little need for banks to lend to each other, because they could do no better.) So, again, it seems there would be little concerns from banks to make settlement or fear overdrafts. The only difference is the perpetual risk-free, effort-free interest income! These are different methods the central bank can choose to manage the interest rate. What are some other important scenarios/methods and their practical differences, both from the banks and the central bank's points of view? PRINCIPLE NINE Under current operating procedures, the central bank's balance sheet expands and contracts endogenously while these changes neither create nor destroy net financial assets for the non-government sector. In your paper, you say: "neither reserve balances nor the monetary base can be expanded or contracted exogenously by the central bank as long as the central bank's target rate is above the rate paid on reserve balances." With our previous questions as background, can you elaborate on this? PRINCIPLE TEN This principle is basically distinguishing between the currency issuer and users Central banks interest rate "matters" because banks use reserve balances to settle payments. Banks and "market forces" do not control the interest rate. This is for the simple fact that banks must settle their transactions at the end of each day, those transactions can only be settled with reserves, and those reserves can only be supplied (created and deleted) by the central bank. Also: There's no use for reserves beyond settlement and reserve requirements, settling payments with anything other than risk-free reserves is obviously riskier than settling them with risk-free reserves, reserves are also the only thing that can settle tax obligations to the state; which can only be done through the banking system, and banks are legal extensions (franchises) of the state. If they tried to bypass the state (and its central bank) by entirely settling amongst themselves, the state would not take this lying down! The banks don't control the central bank and its interest rate any more than average people control the commercial banks at which they have a deposit. Even the most powerful currency user has no power over the currency issuer, because their power largely comes from that issuer! (They were issued a lot, while the rest were issued less.) Any power the user has over the issuer is only because the issuer chooses for it to be that way. FINAL QUESTIONS If you could have your dream government, what economic and financial appointments would you make? What position would you want? If those people got appointed, then what are some of the big changes we would see, particularly regarding monetary policy?

Welcome to episode 140 of Activist #MMT. Today I talk with Scott Fullwiler on his 2008 paper, . Today's part one of a three-part conversation. Today in part one we discuss some generic but related topics, and then principles one and two. Next time in part two we cover principles three to six, and then in part three, principles seven to ten. My full and detailed question and summary list can be found at the bottom of these show notes (look below!). Also, be sure to check out the list of audio chapters to find precisely where each principle, and otherwise, can be found. (Here are links to parts two and three. A list of the audio chapters in this episode can be found right below the resources section in this post.) Today's principles one and two. Principle one is that reserves can only be used for two purposes: Settling payments between banks, and meeting reserve requirements. (There's actually a third purpose, which is it's the only thing that can ultimately settle tax obligations to the state.) Knowing these are its only possible uses, when you hear, for example, that more reserves somehow increase a bank's liquidity, and that this in turn encourages banks to lend more to customers, which then in turn increases economic activity in general… you know they're wrong. The same is true with the reverse: that less reserves somehow discourages lending and reduces economic activity. Principal two says that, because the central bank is the only entity capable of creating and deleting reserves, it has "a fundamental, legal obligation to promote the smooth functioning of the national payment system." Without a functioning payment system, society would, without exaggeration, break down. If a bank can't settle its payments with another bank, then everyone expecting a payment won't receive it, and everyone expecting payment from them also won't receive it. And on and on. Trillions of dollars go through the federal reserve system every day. More goes through this system in the United States each week then an entire year's worth of GDP. Not to mention, the US payment system is central to most of the payments for the entire world, and so the US payment system breaking down would have global implications. (As a brief side note, this latter point is leveraged by the United States to surveil and manipulate most nations around the globe. One example is how, when Iraq threaten to eject all US troops, the US responded by threatening to forbid Iraq from using its payment system, thereby potentially disconnecting it from the entire world. This is the big story that lurks behind the so-called petrodollar. Here is a fascinating .) And now, onto my conversation with Scott Fullwiler. Enjoy. Resources () 2017 paper by Rohan Grey, 2015 paper by Perry Mehrling, 2000 paper by Stephanie Bell (now Kelton), The updated version of this paper, from 2009, consolidates the original ten principles into around seven, and then adds some more. It's much longer, and is a chapter in the book (as co-edited by Scott) called . Audio chapters 5:06 - Hellos 6:55 - My boys 8:49 - Our meeting, and Twitter 11:27 - The plan 12:17 - The Federal Reserve and the banks are in charge of the government (not) 16:58 - How do you know what you know? 19:52 - How the paper came to be 23:08 - What would change about your paper if you could write it again? 25:25 - The horizontalists versus structuralists debate (plus circuitists and chartalism) 27:54 - MMT agrees more with horizontalists, but Randy Wray had one unexpected element of agreement with structuralists. 30:34 - Steve Keen's Debunking Economics opens with the false labor supply-demand curve 31:37 - Principle 1: Reserves can only be used for settling payments and meeting reserve requirements. 35:57 - Aside from banks and other central banks what other institutions and entities have reserve accounts? 38:24 - Principle 2: The primary directive of central banks is to preserve the stability of the payment system (which is...

Most people think economics can be summarised in just two words – supply and demand. Where they cross that determines price and as they move the price moves. But what if the supply curve is wrong, or meaningless. One of the first economists to question that was Piero Sraffa, an Italian economist who had grave misgivings about the law of diminishing returns. Steve Keen talks through Sraffa's life and theories on this week's Debunking Economics podcast. Hosted on Acast. See acast.com/privacy for more information.

Last week on the Debunking Economics podcast Phil and Steve talked about the likely imposition of Austerity 2.0 around the world, in particular in the UK. Steve said there's really no need for it. This week he explains more about how cuts in the government deficit starves the private sector of cash, which will guarantee a recession, or worse. Listen in for an easy-to-follow explanation of how a government deficit increases money in circulation and how reducing that deficit shrinks the money supply. They talk about Wynne Godley's explanation of sectoral balances, and how the interplay between government spending and private sector money is how the economy works now. The complicating factor, is foreign spending. What happens when government money finds itself overseas? Hosted on Acast. See acast.com/privacy for more information.

With interest rates, mortgage debt, and housing prices rapidly surging, many Australians wonder whether and when the bubble is going to burst… The question is: how can property remain affordable without causing a price crash, especially when two-thirds of the population are owner occupiers? Known critic of modern economic theory Steve Keen joins us today to reveal everything mainstream economists get wrong about the property industry. He shares his insights on the possibility of a property crash and how first-home owners might be vulnerable. We also discuss the rising level of household debt, what it can ultimately result in and how the government can intervene. If you enjoyed the show, do like, rate, subscribe, and share us on social media and if you have your own questions you need clarity on, email us at questions@theelephantintheroom.com.au! See you in the episode!   Episode Highlights: What Economics professors get wrong [02:36] The determinant of change in property prices [06:16] On measuring household debt [09:01] Why first-home buyers are vulnerable to rising debt [14:09] What can trigger a price crash, aside from a debt crisis? [18:50] How the government can stimulate property demand [20:27] Getting inflation under control [23:56] The possibility of a property crash in Australia? [28:45] Steve's Senate election pitch: money creation [32:59] The need for a modern debt jubilee [35:37] The current state of consumer confidence [38:14] The issue with government debt [40:44] Sustainable long-term solutions to housing [53:54] The economic impact of climate change [57:34]   About our Guest: Steve Keen is a heterodox economist and an author. His two most famous books, Debunking Economics and The New Economics, are both critiques of modern economic theory that discuss debt deflation and financial instability. Dr. Keen was a professor at the University of Western Sydney and Kingston University in London. Now, he is leading the development of Minsky, a software platform for visually modeling national economies.    Links from the show: Steve Keen TNL Housing Policy: https://bit.ly/3PvH1dn  House prices to fall 40%. Prof Keen says RBA is 'brain dead': https://bit.ly/3T4JHBY  Steve Keen's Debtwatch: https://bit.ly/3QS7gvz  Steve Keen's Profile: https://www.keenforthesenate.com/    Connect with Us: Looking for a Sydney Buyers Agent? www.gooddeeds.com.au Work with Veronica: https://linktr.ee/veronicamorgan Looking for a Mortgage Broker? www.wealthful.com.au Work with Chris: hello@wealthful.com.au  Send in your questions to: questions@theelephantintheroom.com.au    Find this episode on our website: https://www.theelephantintheroom.com.au/podcasts/243   If you've enjoyed this episode, don't forget to like, share, rate and subscribe for more!See omnystudio.com/listener for privacy information.

On the Why Curve podcast last week, Phil (and Roger Hearing) spoke to Daniel Gros, Director of the Centre for European Policy Studies, who argued that the gas crisis in Europe will be largely resolved by the pricing mechanism. High gas prices from Russia are making LNG imports feasible, because Europe will pay more than Asia for supplies. It won't completely bridge the shortfall, he says, but if Europeans make a 15 percent cut in usage, then there will be no need to negotiate with Putin. This week on the Debunking Economics podcast Steve Keen argues that the pricing mechanism ignores the needs of the poor and has, for decades, favoured the rich. The fact that governments need to subsidise low-income households against rising fuel prices, whilst energy companies report record profits, demonstrates just how broken the pricing mechanism is. Listen to the end of this podcast for some very exciting news.

On the Why Curve podcast last week, Phil (and Roger Hearing) spoke to Daniel Gros, Director of the Centre for European Policy Studies, who argued that the gas crisis in Europe will be largely resolved by the pricing mechanism. High gas prices from Russia are making LNG imports feasible, because Europe will pay more than Asia for supplies. It won't completely bridge the shortfall, he says, but if Europeans make a 15 percent cut in usage, then there will be no need to negotiate with Putin. This week on the Debunking Economics podcast Steve Keen argues that the pricing mechanism ignores the needs of the poor and has, for decades, favoured the rich. The fact that governments need to subsidise low-income households against rising fuel prices, whilst energy companies report record profits, demonstrates just how broken the pricing mechanism is. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

On this episode, we meet with Economist, Author, and Research Fellow at the Institute for Strategy, Resilience, and Security at University College in London, Steve Keen. Keen discusses how mainstream economics misses the centrality of energy to our economy and to our futures, the naive treatment to the risks of money and debt creation, and the disconnect economic theory has to climate change risks. About Steve Keen: Steve Keen is an economist, author of Debunking Economics and The New Economics: A Manifesto, a Research Fellow at the Institute for Strategy, Resilience, and Security at University College in London.

**A transcript is available for this and every episode of the podcast at https://realprogressives.org/macro-n-cheese-podcast/ (realprogressives.org/macro-n-cheese-podcast/) where you will also find an Extras page with links to resources related to the episode.** In one of the most exciting pairings we've had on this podcast, Michael Hudson and Steve Keen join Steve Grumbine to talk about geopolitics, international production and trade, the climate crisis, and a bit of MMT. Grumbine begins by asking them to address Warren Mosler's position that imports are a benefit and exports are a cost. Keen and Hudson have a different take on this question, and we'll be interested to hear how our listeners respond. “Well, America is going to make a killing on oil exports because the United States controls the world oil trade. The US is also a major agricultural exporter, and it'll make a killing because NATO has imposed sanctions on Russia, preventing Russia from exporting oil and food. It's the largest grain exporter into the economy. So you're going to have South America, Africa, and the global South countries all of a sudden running big deficits.” (Hudson) In a previous interview, Steve Keen spoke of broken supply chains resulting from the COVID pandemic. Spreading production across the globe results in a fragile system, easily disrupted by war, famine, or other catastrophic events. From another angle, around 20% of our carbon production comes from the mechanics of shipping goods around the world. He also asks if imports are a benefit for nations without monetary sovereignty. Hudson is deft at painting a vivid picture of the current international political economy. US attempts to isolate Russia have backfired, evidenced by BRICS and the strengthening alliances among non-NATO nations. He describes a world being split into two different economic zones. “China doesn't have a financial oligarchy because it treats money and credit as a public utility through the Bank of China. And so the Bank of China, as we said, makes loans to actually develop the economy. And that's what Russia says it's going to begin doing, not to create a financial class to make money at the expense of the 99%. So we're dealing with a civilizational problem. And the question is, which form of civilization? Can you rescue Western civilization from the wrong track? Well, only by creating an alternative on the right track and leaving Western civilization and say, well, you're missing out on the development. Do you want to continue in poverty or are you going to have a revolution?” Keen and Hudson are two old friends, each with their own distinct but overlapping focus. Between them they bring colorful insights and information to the conversation. In this episode they touch on the American Constitution, the stranglehold of the FIRE sector, and the history of debt jubilees. They talk about the European Green Parties (spoiler alert: they are cheerleaders for neoliberalism). They contrast and compare the World Bank to the Bank of China, and their respective roles vis-à-vis humanity. They discuss de-development and possibilities for the future of the planet. Steve Keen is a Distinguished Research Fellow at UCL and the author of “Debunking Economics,” “Can We Avoid Another Financial Crisis?” and his latest “The New Economics: A Manifesto.” His main research interests are developing the complex systems approach to macroeconomics, and the economics of climate change. @ProfSteveKeen on Twitter Michael Hudson is President of The Institute for the Study of Long-Term Economic Trends (ISLET), a Wall Street Financial Analyst, Distinguished Research Professor of Economics at the University of Missouri, Kansas City. He recently published “The Destiny of Civilization – Finance Capitalism, Industrial Capitalism or Socialism.” For access to his many books, articles, and interviews, go to michael-hudson.com

Dr. Keen is known for his criticisms of orthodox economic thinking and its detachment from reality. Mr. Keen received his bachelor's degree from the University of Sydney. He went on to complete his master's degree and Ph.D. in Economics and Economic History from the University of New South Wales. He is the author of several books on economics, of which the two most famous are Debunking Economics and The New Economics. Both are critiques of modern economic theory that discuss debt deflation and financial instability. Dr. Keen has taught at the University of Western Sydney and Kingston University in London. He briefly worked as a fellow at the Centre for Policy Development in Australia. Dr. Keen has since retired and is now leading the development of a software platform called Minsky, which will be used to create visual models for national economies that are more accurate than previous iterations. Together we discussed the flaws behind the neoclassical economic framework, how human beings' nature directly contradicts the current philosophical underpinnings in economics, and how firms can get away with charging prices above their marginal costs. To check out more of our content, including our research, visit our website: https://www.hgsss.org/

The inflation genie is out of the bottle. Can we get it back in there before it does too much damage? Central banks are trying to tackle it by racing each other to put up interest rates, possibly to levels we haven't seen in years, despite the fact we're all leveraged to the hilt with our mortgages. Can that be done without causing a recession? More to the point, does monetary policy actually do what central bankers think it will? On this week's Debunking Economics podcast Steve Keen tells Phil Dobbie that its up to governments, not banks, to bring inflation down. Instead, it seems, everyone is doing exactly the wrong thing! Subscribe to hear this podcast in full.

Professor Steve Keen, Honorary Research Associate with the Institute for Strategy, Resilience and Security at the University College London, was one of the handful of economists to realize that a serious economic crisis was imminent, and to publicly warn of it from as early as December 2005 (http://mpra.ub.uni-muenchen.de/15892/). This, and his pioneering work on modelling debt-deflation, resulted in his winning the Revere Award from the Real World Economics Review (http://rwer.wordpress.com/) for being the economist whose work is most likely to prevent a future financial crisis. He is author of Debunking Economics, which explains in detail why the orthodox economic theory is not only wrong, but more of a threat to the survival of humanity and the more recent: New Economics: A Manifesto, which gives ideas of how we can shift to a new system of exchanging value.He is co-creator of the Minsky App  and of the Ecocore Universal Carbon Credits. In this episode, we explore some of the wilder falsehoods of the currently orthodox model of economics, and dive into the ways we could structure a model that could work differently. Debunking Economics Podcast: https://podcasts.apple.com/gb/podcast/debunking-economics-the-podcast/id1484374606?i=1000552938203Patreon Site: https://www.patreon.com/ProfSteveKeenUniversal Carbon Credits: https://ecocore.org/proposal/

In this episode, I chat with renowned heterodox economist Steve Keen about Economics.We dive into the history of capitalism as a system of organisation, as well as the origins of the theories created to explain it and unearth the assumptions made by early theorists and the problems that these have created in our current system. We also talk about the nature of money, the 2008 financial crisis, how conventional economists understand the climate crisis, and what a realistic economic theory might look like. To find out more about Steves work;His PatreonThe Debunking Economics podcastHis books are; The New Economics Manifesto, and Debunking Economics. 

What kind of politician would want to give every adult $100,000? From employment to housing to banking, Anne & Kev chat with Steve Keen about the sort of policies a progressive economist turned political candidate, might want to implement.Heterodox professor of economics, Steve Keen, recently made waves when he announced he will be running as a senate candidate with TNL party in the next federal election. Steve is an outspoken critic of mainstream economics, with his 2001, 2011 book, "Debunking Economics" and recent "The New Economics: A Manifesto".Show notesSteve Keen, crowd-funded economisthttps://www.patreon.com/ProfSteveKeenSteve Keen's own podcasthttps://debunking.podbean.com/More about TNLhttps://independentaustralia.net/politics/politics-display/mainstream-media-no-friend-to-the-new-liberals,15564CreditsTheme music:One in Ten by UB40When Aliens Come Down from Marsby The Whizzieshttps://freemusicarchive.org/music/The_Whizzies/The_Whizzies/kzz016_-_the_whizzies_-_07_-_when_aliens_come_down_from_marsorangefreesounds.comSound effects permitted for non-commercial use under license“Attribution-NonCommercial 4.0 International (CC BY-NC 4.0)” 

Inevitably, as governments spend more and more money to help their economies navigate through the COVID-19 crisis, the questions inevitably being asked is, how will all this be paid for? The assumption is, either governments will have to cut back on spending, or taxes will have to be increased. Few economists or politicians suggest that the debt is never repaid. In this edition of the Debunking Economics podcast Phil Dobie talks with Prof Steve Keen about how central banks, like the Bank of England, are creating money to cover this extra spending. Isn't there a danger that if it gets out of hand we'll end up like Zimbabwe, or Germany after the first world war? Once a central bank has created money to cover government debt, can it ever really be wound back? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Donald Trump is pushing ahead with his protectionist agenda, and possibly with good reason. There were over 17 million manufacturing jobs in the US in 2000, in the 10 years that followed, China joined the WTO and the US lost about a third of those jobs. In this edition of the Debunking Economics podcast Phil Dobbie asks Steve Keen whether protectionism is valid in this day and age. What of the conventional philosophy that trying to do everything locally avoids economies of scale and pushes prices up for everyone? Steve's argument, you need a complex economy to produce efficiency and innovation. It's the lack of protectionism that has stymied growth in many economies. But there are exceptions, especially for an Elon Musk fan boy like Steve! Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Governments everywhere have been pledging billions of dollars – in some cases, trillions – to help their economies navigate through the COVID-19 pandemic. Much of it has been spent supporting businesses and helping to sustain people's income. But what happens when we come out the other side. Quantitative easing is now widespread, but there's still an expectation those central ban purchases will be wound back. So what does that mean for the post-pandemic economy? A question Phil Dobbie puts to Prof Steve Keen in this edition of the Debunking Economics podcast. And are there countries who can't run up debts? Or companies or industries that can't operate effectively with the potential debt they have been forced to build up. Just how long will we be paying for the last few months? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Putting the Corona virus aside for a moment, on this week's Debunking Economics podcast Phil Dobbie talks to Steve Keen about our use of energy. He raises the dilemma of energy prices – if they are too low, usage goes up, expanding our ecological footprint. If you try to counter that by artificially inflating prices, it's the poor who suffer – as evidenced by the riots in Paris. So, how do we limit our appetite for energy, and can we do it without destroying the world economy? And, importantly, can we do it when power creation and distribution is largely in the hands of private companies? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Italy is getting swamped in corona virus cases, whilst China claims the only new infections now come from visitors from overseas. Donald Trump has gone from calling it a hoax to warning that 200 thousand Americans dying will be the best possible scenario. The UK has seen its death rate step up again today, whilst Germany has seen relatively few deaths and in Sweden folks are still eating out at restaurants. In this FREE edition of the Debunking Economics podcast, Phil Dobbie asks Prof Steve Keen which countries are handling the crisis the best, not just to contain the spread, but also to prepare their economy for the recovery. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

How did we allow the spread of the Caronavirus happen? Why were governments and health services so unprepared? In this week's Debunking Economics podcast entrepreneur and venture capitalist Nick Hanauer joins Phil Dobbie and Steve Keen to look at the inevitability of this crisis. Nick says it's all down to the preoccupation with small government. How do we solve it? Massive government spending and the creation of new money. What have we learnt? Steve hopes it'll enable us to focus on the bigger issue, what we're doing to the planet. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Central banks have cut interest rates, some governments have introduced stimulus measures. But still the disease spreads and livelihoods are put at risk. In today's extra (free) edition of the Debunking Economics podcast Prof Steve Keen argues that stimulus measures are nowhere near enough, and serious sums of helicopter money need to be added to everyone's bank account. He has been arguing for some time that there's a need for a debt jubilee to get the economy moving, and now might be the time to do it, starting with the issuance of zero interest debt jubilees and personal bank deposits to cover mortgages and other outstanding commitments. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

We know what makes up the measure of gross domestic product – it is increases in private or government spending, increases in investment or an improvement in your balance of trade. But are those factors all driven by improvements in productivity driven by technology gains? This week on the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether technology improvements are the only real driver of economic growth? Can the economy continually grow without it? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

The manufacturing numbers from China at the weekend showed how hard the sector was hit by the lockdown in Wuhan and neighbouring districts. In today's Debunking Economics podcast Prof Steve Keen says the rest of the world needs to prepare for a similar strategy, that will see production dive as workers don't show up and consumers don't go shopping. It seems likely that central banks will cut interest rates, but that won't stop businesses going bankrupt. So what is the correct policy response? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

It's taken us a few years to tackle the obvious topic for the Debunking Economics podcast, what are the biggest failings of neoclassical economics. Prof Steve Keen tells Phil Dobbie that it starts on page one of rudimentary economics textbooks, which the idea of the demand curve. Having debunked that, he moves on to the capital market line, used to determine investment decisions. Then it's the models being used to determine the impact of climate change. Then the concept of diminishing marginal productivity. And finally, the process of simplifying assumptions. Having dismissed all the major tenants of economics Phil asks Steve if there any laws that apply to the ‘science', in the same way that gravity applies to physics. Or is it all lost in the realm of unproven speculation? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Economists predict GDP growth by looking at business investment, government and consumer spending, plus the net level of exports. In the long term, of course, growth only comes from the products and services you sell and for that the Atlas of Economic Complexity, developed by Harvard University, is a powerful tool. It demonstrates how growth comes to countries with a highly complex mix of products for export – the less complex, the less the growth potential. As Prof Steve Keen says to Phil Dobbie in this week's Debunking Economics podcast, it is the exact opposite of Ricardo's argument of Comparative Advantage. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

One of the constraints of MMT is that to create more government money you need to have a sovereign currency. That rules out countries in the Eurozone and developing nations heavily reliant on the US dollar. Yet the idea of a Green New Deal is to resolve the issue of climate change using MMT. How can you pursue a global issue with a protocol that only applies in certain parts of the world? And how do you apply it without going down the dangerous road of world government? Questions Phil Dobbie puts to Prof Steve Keen in this week's Debunking Economics podcast. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Modern monetary theory tells us that we shouldn't worry about government debt – that governments can create money to spend to projects that will create full employment. Even if that is the case, what happens when the money you need isn't in your currency? It's a question Phil Dobbie puts to Prof Steve Keen in this week's Debunking Economics podcast. You can't create foreign currency, but you might well need it to pay for your government expenditure. So how does Modern monetary theory work in practice, for small countries that need foreign currencies to buy the imports they need to grow their economy? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

According to the World Health Organisation, Antibiotic resistance is rising to dangerously high levels in all parts of the world. New resistance mechanisms are emerging and spreading globally, threatening our ability to treat common infectious diseases. Sadly, the ROI of antibiotic research is now too low for most pharmaceutical companies to consider. In this week's free edition of the Debunking Economics podcast Phil Dobbie and Prof Steve Keen talk about the failings of the free-market system and health provision. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Economics is still built around the age-old factors of production – land, labour, capital and, perhaps, entrepreneurship. Yet, you can't run machines without power and you can't expect workers to function without food. So why isn't energy implicitly included as one of the key functions of the economy? Clearly it should be. In today's Debunking Economics podcast Professor Steve Keen explains how he is working with climatologist Tim Garrett and mathematician Matheus Grasselli to develop a new model, one that reflects the importance of energy in the functioning of an economy and the limits it places on global growth. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

In a recent Debunking Economics podcast Steve Bannister explained his climate modelling and how existing energy technologies won't scale enough to save the planet. Omar Cheema, managing director of Vivantive, disagrees. His company provides advice on clean energy projects for multinational corporations, governments and investors. He says solar power is already providing an efficient source of energy, the obstacles are geopolitical, vested interests and the resistance to provide the necessary capital for regions that could move quickly on solar. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Steve Bannister, from the University of Utah, is special guest on this week's Debunking Economics podcast. He talks to Phil Dobbie about his approach to climate change modelling, based on GDP growth, energy use and carbon emissions. Steve Keen talks about the weakness of other modelling, including Nordhaus' DICE model. Steve Bannisters model predicts things will even out eventually, but will we be alive to see it? Nope. The answer seems to be, there's a need for a new source of energy. Clearly, its where science needs to focus its efforts, but is the sense of urgency strong enough to see if through? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

House prices are crashing down in Australia, with forecasts for Sydney that they'll have fallen by 20% from their peak by the end of this year, with the possibility that they will fall much further beyond that. So how did it get this bad and will this “correction” mean houses will become affordable again, or is more government involvement needed? Pieter Verhoeven, a Debunking Economics listener, asked, “rent control, a good idea?” Phil Dobbie puts the question to Steve Keen. Plus, Carl Gianarakis asked "How much harder is it for young Australian first home buyers today than it was for buyers who bought prior to the introduction of negative gearing?" Listen in for an update on the Aussie housing crisis and what we can learn from it. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Milton Friedman influenced a generation of politicians, turning them from Keynesian economics to a more free-market way of doing things. Margaret Thatcher described him an intellectual freedom fighter. In this edition of the Debunking Economics podcast Steve Keen debunks the Friedman approach to capitalism and Phil Dobbie suggests one politician who has abandoned the approach, because he has increased tariffs, something Milton would be very opposed to. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

The European economy seems to have found itself in sharp reverse, possibly heading into a continent-wide recession. Italy is already there, Greece has witnessed thousands leaving the country to find jobs, and the yellow vest protests show happy unhappy the French are. Then there's Brexit, of course. In this edition of the Debunking Economics podcast, Phil Dobbie asks Prof Steve Keen how much we can blame the Euro for the perilous state of the European economy. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

According to NASA ninety-seven percent of climate scientists believe that climate change is the result of human activities. Only one US President doesn't agree, denying that climate change even exists. But a group of central bankers met recently to decide whether they had a role to play in fixing the mess we're making of the planet. In today's Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether central banks have contributed to the problem, and how far they'd have to shift their reasoning if they want to turn around and be helpful. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

He is running the only country in the G7 to see economic growth accelerate right now. His followers support him however much mud is slung his way. World leaders seem to be know towing to his demands for better trade deals, even though some would argue it smacks of protectionism. So, is Donald Trump doing a good job for America. In this edition of the Debunking Economics podcast Professor Steve Keen describes the US as a Mad Max economy – he tells Phil Dobbie the benefits will be short lived. Listen to find out why. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Western economies are struggling to see growth anywhere near the levels before the global financial crisis. Japan has been struggling with zero growth, or worse, for years. So, what's the cause of the slowdown and will we ever see high growth ever again? More to the point, why the growth obsession. Are there better ways of measuring the health of an economy? And what's the downside of being too focused on economic growth? Phil Dobbie puts all these questions to Prof Steve Keen in this edition of the Debunking Economics podcast. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

With Mark Zuckerberg being probed by the US government recently, and similar hearings being held in the UK, there's been a lot of discussion lately about whether the Internet giants wield too much power. In this edition of the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen why we don't treat them as monopolies, and force their break-up into smaller, competing operators. Steve doesn't agree. He says the problem is, such a move would force prices up, rather than down. But it's not just a question of price, surely? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

It's hard to support everything Vladamir Putin does – he probably was involved in the attack in Salisbury. If not, there are lots of other violations of human rights we can point to. But he does have a lot support in Russia. To understand why, you need to understand the recent past, what Russia is trying to achieve and the role of foreign powers in distracting them from their path. Today on the Debunking Economics podcast, a quick history lesson of a country that has struggled through false theories and bad advice to arrive at a point where it could finally integrate with the rest of the world – that's if someone doesn't blow it up first. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

We've talked a lot on the Debunking Economics podcast about how energy is the only real driver of an economy, so the performance of an economy is driven by the availability of the resource and how efficiently it is captured. Phil Dobbie asks Professor Steve Keen if that means countries with the most energy resources should be the most effective producers of goods, with a healthy trade surplus. If that's the case, why doesn't Saudi Arabia make very much? And could nations embracing renewable energy efficiently become net exporters if their governments invested wisely? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Many people it seems have turned to cryptocurrencies as a way of side stepping banks – a technology that will challenge their dominance and democratise the supply of money. Others look to fintech as a means of cutting out the established finance sector, putting investors and borrowers together, cutting out the middleman. But are they kidding themselves? In this edition of the Debunking Economics podcast Phil Dobbie asks Prof Steve Keen whether they've ignored some of the key roles banks perform. And what about the regulator? Isn't there still a need for regulation? Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

We know there is growing discontent around the world about the distribution of wealth and, it seems, financial crises can make the problem worse. In this edition of the Debunking Economics podcast Phil Dobbie asks Prof. Steve Keen why the boom bust nature of capitalism accentuates the wealth divide and what can be done to remedy the problem. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

We often hear arguments that releasing land to foreign ownership is “selling the farm”. Similarly, foreign owned companies repatriate their profits rather than keeping profits within the local economy. Are these valid arguments? In this edition of the Debunking Economics podcast Phil Dobbie works through the pros and cons of foreign ownership with Professor Steve Keen. Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.

Currencies fluctuate so much that there's a lot of money being made betting on their movements. But isn't that bad for an economy, creating uncertainty in prices for exports and imports? David, a Debunking Economics podcast listener, asks what is the critical factor for ensuring a stable currency. Phil Dobbie puts the question to Professor Steve Keen, but also has the answer first off – he must be learning for these podcasts! Our GDPR privacy policy was updated on August 8, 2022. Visit acast.com/privacy for more information.