Sunday, 20 May 2018

Steve Keen on Sectoral Balances MMT and Monetary Circuit Theory Minsky and Schumpeter.

  1. Roger January 21, 2016 at 5:19 pm # 
    Steve Keen on Sectoral Balances MMT and Monetary Circuit Theory Minsky and Schumpeter.
    Keen draws the important distinction between Post Ante and Ex ante measurement of Aggregate incomes.
    https://www.youtube.com/watch?v=UzxQcTOs4JA
    My presentation at the UMKC Post Keynesian conference in 2012 where I prove that, given endogenous money, effective demand is income plus the change in debt, and show that this is compatible with sectoral balances.
    Keens Program minsky is fun to play with. What I would add with this is this is all Economics it is definitely not rocket science, frankly this is all pretty basic stuff the maths is not difficult. Its the Politics and the Ethics that make any of this controversial because they are the motivations behind the economic choices behind monetary policy and the resultant effects on wealth distribution.
    • Roger January 21, 2016 at 5:42 pm # 
      Steve keen is I think quite kind to MMT and the the sectoral balance approach
      On the other hand, the process from integral/primitive function x(t) to derivative Dx(t), is ill-posed and unstable, in the sense that small perturbations in x(t) may give rise to large perturbations in the derivative, because
      Dx(t)=limΔt→0x(t+Δt)−x(t)Δt
      at 21.22 mins keen says measured income is time looking backwards,
      Following through Claes and his ill posed point, where a Small change in input can have a large change in output the derivative is ill posed .
      it is this instability that Minsky articulated and which Keen shows so well in his Minsky modelling it is however the sort of Instability that leads Technocrats to allow themselves to be fooled by random and unstable events which are simply not predictable.
      • Roger January 21, 2016 at 6:02 pm # 
        here is the same observation related to climate modelling. This is all very similar to one of my fields of study which is Sound Modelling mathematically which uses all of the same functions applied of course to different curves..
        • Roger January 21, 2016 at 8:04 pm # 
          Just to wrap up this line of reasoning and to propose a more realistic treatment of the economy I would venture the Fast Fourier Transform which is used in this example to demonstrate Time domain and frequency domain components in a Sound Signal.
          An economy is clearly not a linear phenomena and neither is Sound when one wishes to model subtleties such as Timbre in a sound one finds that Timbre actually lives in the frequency and not the time domain the FFT allows one to relate the two although there are trade offs in accuracy in technical modeling questions such as windowing for that I am linking to a second video entitled why precision matters.
          This should open at 3.49 mins and describes the FFT and its real and imaginary components
          Now with respect to Precision here is my Friend Katta with her incredible explaination of a very deep concept.
          Anyway economic modelling is really no different to Sound or climate modelling the maths , geometries, complexities and dynamics all use the same mathematical and computing tools.
          This is here as a note to self as much as anything when I collate all the information gathered here which will probably find its way into a blog post.
          My practice in participating in on line discussions is to use them as a sort of seminar to gather together reading from diverse areas of interest and that leads to not begrudging any amount of time it takes to read posts watch links and re read posts.
          I never expect anyone to read my own posts or indeed t read my poems , listen to mysongs or music . I think out loud in writing effectively occasionally some pennies drop for me sometimes not.
          “Never forget that justice is what love looks like in public”
          ― Cornel West
          I would venture that Economists tend to trivialize the subtleties required in the application of these tools in their rush to reduce the economy which is embedded into society and social relations into Economic variables which they also forget are driven by their own policy inputs.
      • JohnG January 23, 2016 at 5:49 am # 
        Just to be clear here, Roger, you are completely misinterpreting what Steve Keen is saying.
        And to further clarify your muddle headedness on this particular subject, Circuit Theory and MMT are entirely compatible. And even further Circuit Theory models of endogenous money creation fit perfectly within sectoral balance accounting and MMT.
        In fact, the Circuit Theorists thinking is accepted as established by the MMT school. The maths fits one side of the equation.
        You haven’t been listening to Steve very well it turns out.
        Macro isn’t just the sum of all micro.
        It has nothing to do with any musical red herrings or anything else you care to muddy the waters with.
  2. JohnG January 21, 2016 at 10:26 pm # 
    The Truth About Poverty In Britain Is Much Worse Than You Think
    The deficit terrorists are winning.