I’ll be very interested to see Keen’s model, especially to see how it copes with randomness, the existence of black swans (unknowable events with a big impact) and reflexivity (people changing their behaviour in response to events that become predictable). Presumably this is what complexity theory is supposed to be good at, because attempts have certainly been made in the past to construct full working models of the economy, such as Oscar Lange’s socialist planning supercomputer, which was much criticised by Hayekians amongst others for being unable to cope with the subjective nature of the tacit information held by the ‘man on the spot’. The Philips machine was another dubious effort at trying to model the economy within a closed system. I’m sure Keen’s model will be far more sophisticated.Emergent Economics
#Minsky (April 9, 2012)
Dan Gay holds a PhD in economics, a Masters degree in economics, a Masters degree in political theory and an Honours degree in politics, philosophy and economics. He works as a consultant for the United Nations and other development agencies in the South Pacific, East Asia, Central Asia and Africa.