Fields Insti­tute MMT-MCT Sem­i­nar

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I’m off to the USA on Thurs­day for two con­fer­ences:

The lat­ter will re-unite the par­tic­i­pants at the Fields Insti­tute MMT-MCT sem­i­nar held in Toronto  on July 3rd this year: myself, Stephanie Kel­ton, Scott Full­wiler, Michael Hud­son, Steve Keen, Matheus Gras­selli and Nathan Cedric Tankus.

I started this post sim­ply because Nathan has been at me for ages to post the pho­tos, and then I real­ized that, though I had put the videos up on Youtube, I hadn’t made a spe­cific post here.

That’s remiss of me (and it also shows why I want to be able to hire staff who will do what I for­get to do). So I’m mak­ing amends now: below are the four pre­sen­ta­tions given at the sem­i­nar, as well as the pho­tographs taken over the two days (OK Nathan, I finally did it).

Firstly, a bit of back­ground to explain why the sem­i­nar was held. It’s no secret that there has been some ten­sion between myself and MMT in the past. This sem­i­nar was an attempt to get past the ten­sion, and try to develop a coher­ent Post Key­ne­sian mon­e­tary macro­eco­nom­ics. It was a great suc­cess on that front–helped out immensely by hav­ing a math­e­mati­cian of Matheus Grasselli’s cal­i­bre involved, since some dif­fer­ences between my approach (for which Mike Hon­ey­church coined the label “Mon­e­tary Cir­cu­ity The­ory”) and Mod­ern Mon­e­tary The­ory were eas­ily resolved with a bit of math­e­mat­i­cal wis­dom.

The key issue here was my asser­tion that “aggre­gate demand equals income plus the change in debt” and the MMT focus upon sec­toral bal­ances in which “the sum of all sec­toral bal­ances is zero”: were they irrec­on­cil­able per­spec­tives (with at least one being nec­es­sar­ily wrong), or could they be rec­on­ciled?

Just days before the sem­i­nar, Matheus Gras­selli (who is Deputy Direc­tor of the Fields Institute–which is one of the world’s pre­miere cen­ters for applied math­e­mat­ics) sug­gested that we try to derive my propo­si­tion from national income identities–which we duly did. The two views, which may super­fi­cially appear in con­flict, are in fact con­sis­tent (Matheus and I will explain how in our pre­sen­ta­tions in Kansas City).

We sent this argu­ment to Stephanie and Scott before the con­fer­ence, and they agreed completely–so a major bone of con­tention was out of the way even before the sem­i­nar began. We were off to a fly­ing start even before we downed any Sake at the pre-sem­i­nar din­ner.

The sem­i­nar itself was held on Canada Day (July 2nd), so we had the build­ing to our­selves, with the six of us, Jim Stan­ford, and Matheus’s PhD stu­dent and col­lab­o­ra­tor Bernard Costa-Lima in atten­dance. I gave the first talk, fol­lowed by Stephanie, Michael, and then Scott. Here they are in the order of pre­sen­ta­tion on the day.

Steve Keen

At the res­o­lu­tion allowed by YouTube, my slides are unread­able in the video record­ing, so here are the slides them­selves recorded from the lap­top.

Stephanie Kel­ton

Michael Hud­son

Scott Full­wiler

The sem­i­nar was a major step in the evo­lu­tion of a coher­ent Post Key­ne­sian mon­e­tary macro­eco­nom­ics, and I look for­ward to con­tin­u­ing the col­lab­o­ra­tion at the UMKC con­fer­ence at the end of the month.

If you liked this post, go check out my sub­scrip­tion site, Debunk­ing Eco­nom­ics. SK

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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  • TruthIs­ThereIs­NoTruth

    It could be a sim­ple default model. A being asset, D debt, E equity.

  • Matheus Gras­selli

    Exactly! And that’s why it was part of the dis­cus­sion.

    Steve has been argu­ing for a long time that aggre­gate demand is income plus change in debt, part of which is used to buy cap­i­tal goods, which are then added to the assets of firms. But some of debt is also used to buy finan­cial assets, putting upwards pres­sure in prices, lead­ing to Min­sky-style spec­u­la­tive bub­bles and finan­cial fragility. 

    I was sim­ply point­ing out that these three quan­ti­ties (cap­i­tal goods, debt, and finan­cial assets) are inter­con­nected at firm level, for exam­ple through the sim­ple Mer­ton model for default explained in the black­board.

  • TruthIs­ThereIs­NoTruth

    that’s pretty cool. It’s a well researched area and a hot topic at the moment as you most prob­a­bly know. I think the assump­tion in the Mer­ton model is that the finan­cial asset rep­re­sents the value of future cash­flows (I could be con­fused here it’s being a lit­tle while), and if that value is less than the value of debt the com­pany is in default, not exactly Min­skian, but I like the gen­eral idea of try­ing link the two approaches. Have you had any luck in doing so (if that is what you are try­ing to do)?

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