Uploaded July 2012 | Updated September 2026, 1 hour ago
Why didn't economists predict the global financial crisis? Because they couldn't, but Dr. Steve Keen did. He won the Revere Award for most clearly and accurately predicting the global recession.
In this second of four segments, Dr. Keen discusses how he learned about debt deflation and built on the 1937 work by John Maynard Keynes and later work by Hyman Minsky. Dr. Keen is in the process of building a new computer software package, named Minsky, to model financial flows.
Keen begins to explain that most economists believe in the neo-classical model of economics, which is a false, inaccurate model, especially since it does not take into consideration banks, debt or even money. Keen's advice, do not listen to neo-classical economists.
Keen then discusses economics Paul Krugman and Alan Greenspan, and why their neoclassical model belief has contributed to the global debt bubble and economic crisis.
Dr. Keen is author of the 2001 book Debunking Economics, and professor of economics at the University of Western Sydney in Australia.
Keen is interviewed by mathematician and speaker Aaron Wissner, founder and executive director of Local Future, a non-profit educational organization based in the the USA.
For more exclusive content with Dr. Keen, search the NewCulture YouTube channel for Keen:
youtube.com/user/newculture/videos?query=keen
This interview was recorded in high-definition in July 2012 at the Fields Institute for Research in Mathematical Sciences at the University of Toronto in Ontario, Canada.
fields.utoronto.ca
Dr. Keen maintains an ongoing blog which documents his research into accurate economic understanding:
debtdeflation.com/blogs
Dr. Keen discussed many concepts, and mentioned many individuals in the full interview. Below is a list of terms and articles mentioned:
Tags: neoclassical economics, efficient markets hypothesis, capital asset pricing model, black shoals option pricing, equilibrium, cycles, Charles Kindleberger, Hyman Minsky, Brad Delong, mathematical models, EconLit, Matheus Grasselli of McMaster University, dynamics, financially stable, great depression, bankruptcy, stability, Debunking Economics, Capital Account, hedge fund, shares, futures, put option, distribution, sigma, deleveraging, software Minsky, software QED, Paul Krugman, INET Institute for New Economic Thinking, Credit Writedowns, John Maynard Keynes, General Theory, Rod O'Donnell, post-Keynesian, Robert Skidelsky, chapter 12 of the General Theory, long run expectations, Back to the Future, rational expectations, prediction, neoclassical model, magical thinking, financial crisis, Robert Shiller, Alan Greenspan, central bank, liquidity, Dow Jones, downturn, bubble, Savings and Loan Crisis, receivership, banks, economic depression, flip that house, derivatives, mortgages, asset prices, leverage, positive feedback loop, cycle, 1987, private debt, gross domestic product, public debt, mortgage debt, capitalist, property, leverage, housing bubble, Case-Shiller Home Price Indices, real terms, consumer price index, CPI, Japanese asset price bubble, stagnation, speculators, investment, innovation, debt, demand, change in debt, declining sales, Japanese economic stagnation, non-orthodox economist, John Cochrane, Robert Lucas, Thomas Sargent, John Prescott, model, geocentric model, Brad DeLong, Mark Talmer (?), behavioral economics, external shock, Nouriel Roubini, macroeconomic, Dean Baker, epicycles, competition, marginal cost, wages, Robert Solow, business cycle, Federal Reserve, Ben Bernanke, debt bubble, downturn, market economy, speculative bubble, flipping, intellectual framework, Post-Keynesian, put option, collar, speculation, chaotic distribution, variation, five sigma, fat tails, expectations, rational, prediction, irrational exhuberence, derivatives, hedge fund, leverage, feedback, housing bubble, subprime crisis, capitalism
References
* Hyman Philip Minsky -
* Charles Kindleberger - Manias, Panics and Crashes: A History of Financial Crisis
* Steve Keen - Debunking Economics (second edition, newly revised)
* John Maynard Keynes - General Theory of Employment (1937)
* John Maynard Keynes - The "Ex-Ante" Theory of the Rate of Interest (1937)
* Gerd Gigerenze - Rationality for Mortals: How People Cope with Uncertainty (Evolution and Cognition)
Why didn't economists predict the global financial crisis? Because they couldn't, but Dr. Steve Keen did. He won the Revere Award for most clearly and accurately predicting the global recession.
In this second of four segments, Dr. Keen discusses how he learned about debt deflation and built on the 1937 work by John Maynard Keynes and later work by Hyman Minsky. Dr. Keen is in the process of building a new computer software package, named Minsky, to model financial flows.
Keen begins to explain that most economists believe in the neo-classical model of economics, which is a false, inaccurate model, especially since it does not take into consideration banks, debt or even money. Keen's advice, do not listen to neo-classical economists.
Keen then discusses economics Paul Krugman and Alan Greenspan, and why their neoclassical model belief has contributed to the global debt bubble and economic crisis.
Dr. Keen is author of the 2001 book Debunking Economics, and professor of economics at the University of Western Sydney in Australia.
Keen is interviewed by mathematician and speaker Aaron Wissner, founder and executive director of Local Future, a non-profit educational organization based in the the USA.
For more exclusive content with Dr. Keen, search the NewCulture YouTube channel for Keen:
youtube.com/user/newculture/videos?query=keen
This interview was recorded in high-definition in July 2012 at the Fields Institute for Research in Mathematical Sciences at the University of Toronto in Ontario, Canada.
fields.utoronto.ca
Dr. Keen maintains an ongoing blog which documents his research into accurate economic understanding:
debtdeflation.com/blogs
Dr. Keen discussed many concepts, and mentioned many individuals in the full interview. Below is a list of terms and articles mentioned:
Tags: neoclassical economics, efficient markets hypothesis, capital asset pricing model, black shoals option pricing, equilibrium, cycles, Charles Kindleberger, Hyman Minsky, Brad Delong, mathematical models, EconLit, Matheus Grasselli of McMaster University, dynamics, financially stable, great depression, bankruptcy, stability, Debunking Economics, Capital Account, hedge fund, shares, futures, put option, distribution, sigma, deleveraging, software Minsky, software QED, Paul Krugman, INET Institute for New Economic Thinking, Credit Writedowns, John Maynard Keynes, General Theory, Rod O'Donnell, post-Keynesian, Robert Skidelsky, chapter 12 of the General Theory, long run expectations, Back to the Future, rational expectations, prediction, neoclassical model, magical thinking, financial crisis, Robert Shiller, Alan Greenspan, central bank, liquidity, Dow Jones, downturn, bubble, Savings and Loan Crisis, receivership, banks, economic depression, flip that house, derivatives, mortgages, asset prices, leverage, positive feedback loop, cycle, 1987, private debt, gross domestic product, public debt, mortgage debt, capitalist, property, leverage, housing bubble, Case-Shiller Home Price Indices, real terms, consumer price index, CPI, Japanese asset price bubble, stagnation, speculators, investment, innovation, debt, demand, change in debt, declining sales, Japanese economic stagnation, non-orthodox economist, John Cochrane, Robert Lucas, Thomas Sargent, John Prescott, model, geocentric model, Brad DeLong, Mark Talmer (?), behavioral economics, external shock, Nouriel Roubini, macroeconomic, Dean Baker, epicycles, competition, marginal cost, wages, Robert Solow, business cycle, Federal Reserve, Ben Bernanke, debt bubble, downturn, market economy, speculative bubble, flipping, intellectual framework, Post-Keynesian, put option, collar, speculation, chaotic distribution, variation, five sigma, fat tails, expectations, rational, prediction, irrational exhuberence, derivatives, hedge fund, leverage, feedback, housing bubble, subprime crisis, capitalism
References
* Hyman Philip Minsky -
* Charles Kindleberger - Manias, Panics and Crashes: A History of Financial Crisis
* Steve Keen - Debunking Economics (second edition, newly revised)
* John Maynard Keynes - General Theory of Employment (1937)
* John Maynard Keynes - The "Ex-Ante" Theory of the Rate of Interest (1937)
* Gerd Gigerenze - Rationality for Mortals: How People Cope with Uncertainty (Evolution and Cognition)
