More than anyone, Steve Keen has raised awareness of the role of banking and money creation in driving economic cycles. Not only this, he has published just about every presentation and paper of his freely online, and participated in a variety of forums online and in the media.
Not only is he out there putting forward new approaches and ideas, he is doing so in a way that allows every man and his dog to nit pick at his work. That takes guts.
Because of public nature of his work for the past decade, his analysis and communication of these big ideas has evolved to become extremely powerful and hard to ignore. Just about everyone I talk to in the economics crowd these days has been influenced by Keen’s work in some way. Even I am still digesting his reconciliation of accounting identities and the dynamic effect of additional demand from credit creation, which I think could offer a clear path forward for gaining wider acceptance of his dynamic monetary methods.
In the spirit of this public debate I want to take issue with one of Keen’s latest ideas; adding change in credit (debt) to GDP. But I want to do so constructively so that as a profession we can incrementally improve our economic analysis and understanding of macroeconomic phenomena.Fresh Economic Thinking
A comment on Keen’s “Credit plus GDP” measure
Cameron K. Murray