Steve Keen is an Associate Professor in economics and finance at the University of Western Sydney. He identifies as post-Keynesian, criticizing both modern neoclassical economics and (some of) Marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen’s thinking about economics include Hyman Minsky, Piero Sraffa, Joseph Alois Schumpeter, and Francois Quesnay. His recent work mostly concentrates on mathematical modeling and simulation of financial instability.He is a Fellow at the Centre for Policy Development.
Financial instability and debt deflation
Most of the recent work of Steve Keen focuses on modeling Hyman Minsky’s Financial Instability Hypothesis and Irving Fisher’s debt deflation. The hypothesis predicts that an overly large debt to GDP ratio can cause deflation and depression. Here, the falling the price level results in continually rising real quantity of outstanding debt. Moreover, the continued deleveraging of outstanding debts increases the rate of deflation. Thus, the debt and deflation act on and react to one another, resulting in a debt-deflation spiral. The outcome is a depression. Steve Keen argues that the current global economic crisis is the result of too much debt.