Interview Steve Keen (Eurocrisis / Neoklassieke theorie)
While many economists have argued that no one could have foreseen the 2008 financial crash, some economists were sounding the alarm well before the bubble burst. One of them was Steve Keen, a Professor of Economics & Finance at the University of Western Sydney, and author of the book “Debunking Economics: The Naked Emperor of the Social Sciences” (Zed Books UK, 2011). Keen is credited with predicting the 2008 financial crisis in December 2005. He has argued that his foresight on the crisis is due to a little-known secret: that many widely believed economic models have been shown to be wrong, which many economists — particularly those in government policy positions — will not admit.
Keen argues that economic theory is particularly wrong when it comes to the “Efficient Markets Hypothesis,” which still dominates academic thinking about finance, even after the Global Financial Crisis. Since 1995, Steve’s main research focus has been the development of an alternative, empirically grounded theory based on Hyman Minsky’s “Financial Instability Hypothesis,” which argues that finance markets are not self-equilibrating but inherently unstable. Keen’s forthcoming book on the topic, “Finance and Economic Breakdown,” will be published in 2012. He also writes the blog Debtwatch.
Keen talked to Left Eye on Book‘s Christine Shearer about “Debunking Economics,” the problems with many economic ideas and neoclassical thinking, and his own work toward a new model — and theory — of economic systems.
Christine Shearer: You begin “Debunking Economics” with a critique of the fundamental principles of [classical] microeconomics: supply and demand. You argue that the equations around demand are flawed because they assume one consumer that is then aggregated to the level of the market, which you say does not hold up empirically or mathematically. Conversely, for supply, economists argue that firms exercising their profit-maximizing behavior will supply goods at a level in which it is not profitable to produce beyond that level – where marginal cost equals price – but its defining equations only hold up under demonstrably false assumptions?
Lees het hele interview met Steve Keen op : http://imaginedmag.com