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Publication Name: Steve Keen's Debtwatch

Brief description: Analysing the Global Debt Bubble

Publication URL: http://www.debtdeflation.com/blogs/

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Joined: February 14th, 2012


Steve Keen's Debtwatch wrote a new blog post titled Gisellian demurrage currency

Dr. Keen, I am wondering if you have ever seriously considered issuance of Gisellian currency for countries facing unplayable debt (all of them, as far as I know). The scheme I am imagining would have these govts paying off bonds due with G-currency. Bondholders would then, ASAP, spend it on … Continue reading →
(145 days ago)

Steve Keen's Debtwatch wrote a new blog post titled Australia’s Economy is a House of Cards

By Matt Barrie & Craig Tindale. I recently watched the federal treasurer, Scott Morrison, proudly proclaim that Australia was in “surprisingly good shape”. Indeed, Australia has just snatched the world record from the Netherlands, achieving its 104th quarter of growth without a recession, making this achievement the longest streak for any OECD country … Continue reading →
(662 days ago)

Steve Keen's Debtwatch wrote a new blog post titled Shutting down membership

I have recently established a Patreon site https://www.patreon.com/ProfSteveKeen, where people can support my research and advocacy work with donations starting at $1/month. That is now where I will engage in conversation in response to posts. So if anyone here wants to continue a dialogue with me and others, please sign up there. … Continue reading →
(662 days ago)


As an economist, I do something very unusual: I treat money seriously.

Though this may be hard for those who have not done an economics degree to believe, economists have it schooled into them that “money doesn’t matter”–that it is just a “veil over barter”, there to make it easier to swap commodities than it would be if you actually had to find someone who had what you wanted, and wanted to sell what you wanted to buy.

The argument that persuades them goes something like this: ”what would happen if you simultaneously doubled all prices and all incomes? Nothing!” In other words, if consumers are rational (now there’s a much abused word, but I digress), they shouldn’t care about the absolute prices of goods, just their relative prices. So doubling all prices and doubling a consumer’s income shouldn’t cause her to do anything different (but of course, changing relative prices would alter behaviour).

Bollocks. Double all prices and my income, and I’d be much better off because my mortgage payments would take less of my income (even if interest rates were also doubled). That’s because I’m in debt–I have a mortgage. And you can’t simply double interest rates to reach the same outcome as doubling prices, because debt repayment dynamics make the whole thing “nonlinear”: include debt seriously in your analysis of consumption, and the “veil over barter” vision of money collapses. But this “inconvenient truth” is omitted from economics–not because economists are deliberately hiding it, but because they have deluded themselves about the nature of money.

I take it into account, and as a result I get a very different picture of how the economy operates than do conventional (“neoclassical”) economists.

I use this blog to post monthly reports on debt levels in Australia and the USA.