Thursday, December 1, 2016

Egmont Kakarot-Handtke — Rethinking deficit spending

We've discussed this previously here at MNE in terms of the Kalecki profit equation.

AXEC: New Foundations of Economics
Rethinking deficit spending

Rethinking the Profit LawEgmont Kakarot-Handtke | University of Stuttgart - Institute of Economics and Law


franco said...

This paper is why I've always found Egmont's comments confusing, he makes it seem like such a mystery.

franco said...

Of course, there could easily be more to it which I'm missing.

Bob said...

An implication free theory is the greatest mystery of all ;)

AXEC / E.K-H said...


The paper you refer to (Levy et al., 2008) indeed addresses the fundamental issue of economics ‘Where Profits Come From’ but gives the wrong answer. For the formal refutation of the Levy approach see the working paper ‘Keynes’s Missing Axioms’ (2011b)

For the correct explanation see ‘The Emergence of Profit and Interest in the Monetary Circuit’ (2011a).

The lethal error/mistake/blunder of the Levy approach consists in starting with Saving = Investment (2008, p. 6).

For the most elementary explanation of why Saving = Investment has ALWAYS been false and of why Saving = Loss resp. Dissaving = Profit is true see (2015).*

Egmont Kakarot-Handtke

Kakarot-Handtke, E. (2011a). The Emergence of Profit and Interest in the Monetary Circuit. SSRN Working Paper Series, 1973952: 1–22. URL
Kakarot-Handtke, E. (2011b). Keynes’s Missing Axioms. SSRN Working Paper Series, 1841408: 1–33. URL
Kakarot-Handtke, E. (2015). How the Intelligent Non-Economist Can Refute Every Economist Hands Down. SSRN Working Paper Series, 2705395: 1–6. URL
Levy, D. A., Farnham, M. P., and Rajan, S. (2008). Where Profits Come From. pages 1–28. URL

* See also cross-references ‘Refutation of I=S’
and in particular ‘The final implosion of MMT’