Tuesday, August 28, 2012

Randy Wray — Minsky and MMT in the News

We’re off gold. We’re not going back. Get over it.
Economonitor | Great Leap Forward
Minsky and MMT in the News
L. Randall Wray | Professor of Economics, UMKC

9 comments:

Shaun Hingston said...

Predsident Eisenhower's warning about the Military-Industrial-Complex

Full Version Eisenhower Farewell Address

Roger Erickson said...

"to really take Minsky's ideas on board, you have to be willing to surrender some of the precepts of equilibrium economics, which is the sine qua non of most mainstream approaches, ... And this, most economists still are not prepared to do. Minsky is still a bridge too far for most."

That should be carved into stone as a warning example. All refinements are based on letting go of prior presumptions. Show me another field that would advise economists to see systems as in equilibrium. There's a difference between equilibrium and dynamic-equilibrium.

If things are going to appear to be the same, everything must continually change ... beneath the surface.

Roger Erickson said...

any complex system faced with unpredictable future contexts evolves by discovering a seemingly infinite set of distributed tolerance limits for diverse processes;

every system discovers those tolerance-levels permutations by .... well, discovering them;

Ecology, biology, systems theory, thermodynamics ... all would say Minsky's conclusions are self-evident, and obvious over 100 years ago, but where the hell did orthodox economists get their idea that evolving systems are in equilibrium?

paul said...

Roger,

"There's a difference between equilibrium and dynamic-equilibrium."

I think they conflate equilibrium with stability, another term for dynamic equilibrium.

Illustrating that many are apparently unable to think clearly in the abstract, thus context is lost much like it is in discussions wrt "money" or "savings".

Tom Hickey said...

A system must always be in "in equilibrium" wrt to the equations that define invariant relationships, like Y = C + I + G + (X-M). The claim of neoclassical economics is that an economic system tends naturally to a natural equilibrium at full employment. Thus all the talk about "natural" rates, etc., which are admittedly unobservables.

Now the thinking is that there are or may be a multiplicity of natural rates. Sound like "epicycles" in Ptolemaic astronomy/astrology?

Roger Erickson said...

Good one Tom! :)

There's no such thing as "stable" growth or evolution?

Tom Hickey said...

"Grow or die" is the rule in biological systems, i.e., complexity (negative entropy) is increasing or decreasing (entropy). All physical systems are ultimately entropic, that is, increasing complexity is not sustainable due to internal and external constraints. Technology can alter these constraints, as it has already to some degree, i.e., life expectancy has increased. But there is no reason to think that this is infinitely extendable as far as I can see, or at least will be anytime soon.

Roger Erickson said...

You talking about life expectancy of individuals or their their culture?

Both are among many inter-dependent variables manipulated at will to extend species lifespan, and eventually ecological lifespan.

Remember, until we sever ties with earth, we're just part of the soup. Earth could start over without us and barely notice the time lag to recreate or surpass our supposed achievements.

Tom Hickey said...

You talking about life expectancy of individuals or their their culture?

Both. They are analogous. All physical systems are entropic and social systems are also "entropic" by analogy. Since their elements are biological, social systems behave in ways similar to biological system even though they are not biological.

Prigogine is best known for his definition of dissipative structures and their role in thermodynamic system sfar from equilibrium, a discovery that won him the Nobel Prize in Chemistry in 1977. In summary, Ilya Prigogine discovered that importation and dissipation of energy into chemical systems could reverse the maximization of entropy rule imposed by the second law of thermodynamics.[8]
Wikipedia — Ilya Prigogine