Help Kickstart Minsky

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As regular readers would know, I have been developing a computer program for building strictly monetary dynamic macroeconomic models. New readers might have seen this article in The Economist:

Reforming macroeconomics: Claudio Borio on the financial cycle

where my work received the following mention:

Steve Keen, an Australian economist, has long argued that macro needs to incorporate these ideas, and has developed a prototype of a computer program, called "Minsky," that can be used to model economies as monetary systems. So while most economists have not embraced Mr Borio's agenda for the reformation of macro, some have. That is encouraging news. (Click here for Claudio Borio's paper)

The program is called Minsky in honor of the late and great monetary economist Hyman Minsky. It is not a model of the economy as such, but a visual tool by which models can be developed.

It has been under development for roughly a year now, thanks to a US$128,000 grant from the Institute for New Economic Thinking. That has enabled me to hire one brilliant programmer, Dr. Russell Standish, for about 10-20 hours a week--the most that a contract programmer can afford to devote to a single project. Consequently, the program as it currently exists represents about 3-4 months of programming time. That's produced a functional program, but it is still in its infancy. I want to take it to adulthood, and for that I need serious funding that will enable me to hire several top-notch programmers for several years.

That's where you come in--if you are willing. Next Wednesday I will launch a campaign on Kickstarter to raise development funding for Minsky.

Producing a combined model Keen and Krugman's visions of lending in Minsky

Producing a combined model Keen and Krugman's visions of lending in Minsky

The amount I’m ask­ing for on Kickstarter–US$50,000–is quite mod­est. To push the anal­ogy, that’s enough to get the pro­gram from infant stage to tod­dler. But obvi­ously I’m hop­ing to raise a lot more–enough to get Min­sky to the end of high school, so to speak.

That would require hir­ing Rus­sell full-time for at least 3 years (oth­er­wise he’ll only be able to devote half or less of his time to Min­sky), as well as two bril­liant and ded­i­cated young pro­gram­mers Nathan Moses and Kevin Pereira, who have almost com­pleted the devel­op­ment of a ver­sion of Min­sky that can be run from a web­site and on tablets. That will take about US$1 million.

So if you agree that eco­nom­ics needs reform, if you’ve enjoyed my work to warn of the eco­nomic cri­sis over the last seven years, and if you’d like to help eco­nom­ics finally over­come its fear of money and dynam­ics, please make a con­tri­bu­tion to the devel­op­ment of Minsky.

You can pre­view the cam­paign here:

Pre­view of Kick­starter Campaign

The cam­paign will go live on Wednes­day Decem­ber 19th. Please get ready to put some finance into build­ing Min­sky. To make a con­tri­bu­tion, all you need at your end is an account at Ama­zon.

About Steve Keen

I am a professional economist 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 debts accumulated in Australia, and our very low rate of inflation.
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24 Responses to Help Kickstart Minsky

  1. ken says:

    To mod­ify an old proverb “The road to hell is paved with low inter­est rates”. I notice that Glenn Stevens hasn’t worked that out yet, or maybe he is just not telling any­one. Maybe the approx 1 mil­lion per year is for believ­ing in poli­cies that haven’t worked elsewhere.

  2. OlegR says:

    Hi Steve,

    I am a pro­gram­mer, and poten­tially can help with devel­op­ment (in my spare time, for free).
    Do you have (or have you con­sid­ered set­ting up) some sort of source repos­i­tory for Min­sky (for exam­ple, on GitHub.com)?

  3. OlegR says:

    In gen­eral, how open you are to the crowd-sourcing devel­op­ment (with some­body you know in leader/coordinator role)?
    How does devel­op­ment logis­tics for Min­sky look like?

  4. Nebbiolo71 says:

    Hi Steve,

    Have you ever con­sid­ered to make this SW open­source? I mean, I’m quite con­fi­dent that there are many engi­neers out there will­ing to for free develop tools that makes us bet­ter under­stand the econ­omy and also be an extremely valu­able tool in edu­ca­tion. I see many appli­ca­tions for this SW — why not try this path?

  5. Steve Keen says:

    Very. The devel­op­ment logis­tics are pretty easy because (a) I’ve already done the ulti­mate ambi­tion for Min­sky in math­e­mat­i­cal pro­gram­ming lan­guages, so we know where we’re going and (b) I have 3 local pro­gram­mers who are ded­i­cated to the con­cept itself and who work briliantly as a team. Plus we have one vol­un­teer in the USA who is as ded­i­cated as the ones I would hire using the Kick­starter funnding.

  6. Steve Keen says:

    Check out http://sourceforge.net/p/minsky/home/Home/ Oleg. Rus­sell Stan­dish is the main pro­gram­mer, and we have one very active devel­oper in the USA as well. There is plenty of work to be done, as you will see from the list of tickets.

  7. Nebbiolo71 says:

    Per­fect, i didn’t know…

    I’ll see if I can involve some Swedish pro­gram­mers in this impor­tant project.

    Good luck with the funding!

  8. Denis says:

    Methinks a cou­ple of things aren’t right on the Kick­starter pre­view, if I may.

    The very first video does the project lit­tle good, as it seems to be addressed to some­one who knows absolutely noth­ing of the econ­omy or mod­el­ing. In con­trast, your most likely fun­der is going to be some­one read­ing Slash­dot or sim­i­lar sites, aka engi­neers and rea­son­ably sophisticated/scientifically lit­er­ate people.

    Along the same lines, I’d wager the Min­sky project would find a bet­ter home over at github, rather than source­forge. This would make the repos­i­tory dis­trib­uted. Most open source soft­ware con­trib­u­tors have switched to git since Tor­vald intro­duced it a half dozen years ago. Git is faster than svn, and allows for eas­ier fork­ing and merg­ing. And github has very neat tools to mon­i­tor the plethora of poten­tial forks and branches.

    I’d also sug­gest rephras­ing parts of the Kick­starter in a more pos­i­tive man­ner. I’ve admit­tedly only scanned through it, but the pitch felt a bit cocky: “They got it all wrong, we didn’t, and we need your fund­ing to extend this model.” The sale would, I think, be eas­ier if it read more like: “Here’s what they got wrong and why, here’s a model that gets those things right, we need your fund­ing to extend it.” The sec­ond video, in that sense, is bet­ter than the intro­duc­tion video.

    That sec­ond video, as an aside, could use a tiny bit of sound engi­neer­ing. If you pop it into a video edit­ing tool, you should be able to fil­ter most if not all of the back­ground noise. :-)

    Any­way, the sug­ges­tion I’d make is basi­cally this:

    1. Short introduction

    A short inter­view of Steve Keen, explain­ing in a few min­utes why exist­ing mod­els are a fail­ure, how the Min­sky model improves over them, its cur­rent sta­tus, where you’d like to take it, and how it might be use­ful to Joe Schmoe on the street.

    2. Debunk­ing economics

    A 10 minute video that briefly goes through what econ­o­mists got wrong in the past cen­tury. Don’t be too hard on main­stream econ­o­mists, even know you think no less. Just a to-the-point “here’s what they say, but here are the facts.”

    Peo­ple fre­quently have strong opin­ions on eco­nom­ics, and hate it when they’re told in-their-face that they’re not just wrong, but dead wrong. The video should gen­tly cast doubts, while rub­bing them in the right way.

    3. Mod­el­ing the GFC

    Your paper describ­ing the GFC in under 1000 words would go here, along with a 10–15 minute video that walks the viewer through endoge­nous money cre­ation and the result­ing cor­re­la­tions between change in debt and eco­nomic activ­ity, while intro­duc­ing a small model based on account­ing iden­ti­ties that matches the obser­va­tions. Con­clude it on a note that the sim­pler model can go hay­wire, as well as cycle in a benign and pros­per­ous pattern.

    4. The Min­sky project

    This is where you should explain the cur­rent sta­tus and its recent devel­op­ments, and where you’d like to take it. It might be a good idea to intro­duce this by expand­ing on your recent work on what hap­pens when a gov­ern­ment entity kicks in. As in, look, the model can be made more com­plex and real­is­tic, here’s an exam­ple of how, and here’s a whole slew of things we’d like to add; we need your money to make it happen.

    Any­way, my $0.02 worth. :-)

    Oh, and don’t for­get to high­light the Kick­starter to a few big play­ers in the finance, tech and gad­get press (e.g. Zero­hedge, Barry Ritholz, Mish Shed­lock, Busi­ness Insider, Cap­i­tal Account, but also Slash­dot, Red­dit, Hacker News, Dar­ing Fire­ball, even Boing Boing…)

  9. Denis says:

    There’s a last point I for­got: A learn more section…

    The Kick­starter should include a link some­where that goes to your lec­tures, in the event a reader might want to learn more. I’m think­ing about the lec­tures than spanned a dozen or so classes, wherein the first half was mostly ded­i­cated to why and how econ­o­mists were wrong, and the sec­ond half was mostly on mod­el­ing and play­ing with Min­sky. (They made me wish I returned to school. Thanks for that.)

    And, of course, another link should lead to your book.

  10. peterjb says:

    I really can’t believe half the stuff that you write about your­self Steve but this really takes the cake:

    The devel­op­ment logis­tics are pretty easy because (a) I’ve already done the ulti­mate ambi­tion for Min­sky in math­e­mat­i­cal pro­gram­ming lan­guages, so we know where we’re going and… ”

    You ought to be embar­rassed, but I am devel­op­ing a real image of the lengths that you will go to, to pro­mote your fool­ish eco­nom­ics non­sense (and per­haps attract a Nobel Prize — after all, the gave one to that moron Krug­man) aka snake oil,

    I believe that it was the orig­i­nal soft­ware, that you pur­chased, that eas­ily dealt with your ulti­mate math­e­mat­i­cal solu­tion (sic) and not vice versa.

  11. koonyeow says:

    Title: koonyeow — An Athen­ian When Fac­ing Ladies, A Spar­tan When Fac­ing Charlatans

    Fool­ish eco­nom­ics non­sense is

    1. Not fal­si­fi­able;
    2. Unable to stand the test of time.

    Steve’s Mon­e­tary Cir­cuit The­ory is very unlikely a non­sense because it is

    1. Fal­si­fi­able (and I am not aware of any real world exam­ple that has fal­si­fied Mon­e­tary Cir­cuit The­ory);
    2. Only time will tell if Mon­e­tary Cir­cuit The­ory is robust to the test of time (Galileo, Boltz­mann and Ein­stein are robust to the test of time).

    One should know who Alan Sokal is before one dis­guises post-modernism as science.

  12. Steve Keen says:

    Those are excel­lent com­ments Denis–I agree with all of them. Now that the cam­paign is about to go live, and I prob­a­bly have some time to work on it, I’ll try to address all those points. I’d like your feed­back once I’ve done so.

  13. Denis says:

    @Steve: Don’t hes­i­tate to ping me by email, I’ll be happy to help out with feed­back, and pos­si­bly more.

    A last point I for­got to men­tion, since the Kick­starter isn’t live yet. Peo­ple like to invest in a win­ner, mean­ing it’s bet­ter to secure the ini­tial fund­ing quickly. Kick­starters that gather traf­fic halfway through while lack­ing ini­tial trac­tion (i.e. still not lean­ing towards the goal) report­edly tend to fail.

    In this light, con­sider that poten­tial donors (includ­ing this blog’s read­ers) might be on vaca­tion in the next two weeks, or might already have overex­tended their Christ­mas bud­get. Espe­cially if you haven’t com­piled (and more ide­ally, pinged) a list of press con­tacts to pro­mote it yet. Imho, you should aim to start the Kick­starter a week or two into Jan­u­ary rather than this WE — with the added bonus of you being bet­ter pre­pared to pro­mote it to the press.

  14. Lyonwiss says:

    @ Peterjb Decem­ber 22, 2012 at 12:27 pm

    To a ham­mer every­thing is a nail. A bet­ter ham­mer is use­ful only if the prob­lem is a nail.

  15. peterjb says:

    @ Koonyeow Decem­ber 23, 2012 at 5:13 am | #

    … sci­ence“
    Are you sug­gest­ing that “Eco­nomic Theory(s)” is “sci­ence”? LOL

    Life, FYI, thrives in a non-equilibrium state; it can­not be oth­er­wise. There­fore, con­sen­sual opine, man­i­fests itself as just more garbage being added to the pile. Don’t like that? But that is what the 2nd. Law of Ther­mo­dy­nam­ics is all about.

    We” con­sume resources and cre­ate pol­lu­tion; we are Entropic. This is what we (homo sapi­ens) are; our nature is self destruc­tive; we are unsta­ble and can­not thrive in an envi­ron­ment of equi­lib­rium: Love­lock — Crick — Cohen & Stew­art, et al.

    Does Keen’s Eco­nomic The­ory, or any other “Econ­o­mists” ET take this as a fun­da­men­tal? No?

    Well then, out­side the Aus­trian Schools, all Eco­nomic The­o­ries (opin­ions) rep­re­sent, ana­log­i­cally, mas­tur­ba­tion, and this includes Keen’s stuff.

    But to bull­shit your pur­chased ener­gies, so as to detract from the intel­lec­tual ener­gies of oth­ers, upon whom you claim as your plat­form of intel­lec­tual sta­tus, must rep­re­sent the great­est sin known to mor­tal man. It seems that the Nobel Com­mit­tee demands such as its fun­da­men­tal­ist input, these days.

    FYI Lyon­wiss Decem­ber 30, 2012 at 9:19 pm | #

    The prob­lem is not the nail — it’s the hammer!

    Happy New Year to all,

    Ho hum

  16. koonyeow says:

    Title: I’m Sorry That My Com­ment Is Mis-understood (And I’m Sorry, Steve, of That Old Grudge)

    I’m not sug­gest­ing that eco­nomic the­ory is sci­ence. Any the­ory can be sci­en­tific as long as it is con­fined within the sci­en­tific method. A physi­cist treats the word ‘the­ory’ very dif­fer­ently than a neo-classical economist.

    My com­ment ‘One should know who Alan Sokal is before one dis­guises post-modernism as sci­ence.’ is actu­ally an unfriendly warn­ing against you, Peterjb, espe­cially your blog ‘Verbewarp’.

    Are you a physi­cist, or a ther­mo­dy­nam­i­cist, or a mechan­i­cal engi­neer, Peterjb? If not, please use the words ‘entropy’ and ‘2nd Law’ very carefully.

    Dear read­ers,

    When­ever you see or hear some­one men­tions the words ‘entropy’, ‘2nd Law’, ‘quan­tum’ or any words that appeared in physics, chem­istry and biol­ogy, it is strongly advised that you know the dif­fer­ence between sci­ence and pseudo-science.

    I’m sorry that I started the new year in an unfriendly tone.

  17. Lyonwiss says:

    @ Peterjb Jan­u­ary 1, 2013 at 1:34 am

    The prob­lem is nei­ther a nail nor a ham­mer. A ham­mer is a tool, which only causes prob­lems in the wrong hands. A ham­mer, in and of itself, is not the prob­lem. Using lan­guage in a fast and loose way (par­tic­u­larly in eco­nom­ics) is the ori­gin of many prob­lems, includ­ing muddled-headed think­ing and confusion.

  18. peterjb says:

    @ Lyon­wiss Jan­u­ary 1, 2013 at 12:01 pm | #

    Thanks for the con­fir­ma­tion:
    ’In the begin­ning was the word, and the word was with God; and the word was God’ (paraphrased).

    My inter­pre­ta­tion: Ham­mer is anal­o­gous to word.

    Expla­na­tion: We humans can only sur­vive and adapt in our milieu — this is what we do; we are not sci­en­tists and at the nor­mal level of exis­tence, do not have the innate cog­ni­tive skills nec­es­sary for the pur­suit of the sci­ences; we are tech­ni­cians and dis­cover in the same man­ner as seals learn to open coconuts by smash­ing them against rocks. Pre­cisely the same process and skill set.

    And, as the rule insti­tu­tional sci­ence, per se, like the play­ground for “eco­nom­ics” does not fol­low sci­en­tific pro­ce­dures that have been estab­lished; what we have is polit­i­cal expe­di­ency, opin­ion and group grat­i­fi­ca­tion for the “col­lec­tive”. It is this “col­lec­tive” that cre­ates its own milieu and imposes its own polit­i­cally cor­rect rules of behav­ior. That is to say, he (or she) that has the innate poten­tial for reach­ing for indi­vid­ual / self func­tion, is seri­ously lim­ited /constrained or best, destroyed, as @Koonyeow would appear to favour.

    There are excep­tions, but few; there are good men but not as the rule, as it is our self imposed milieu that demands oth­er­wise; we demand dogma; we demand “money” (while hav­ing no idea what it is); we must have cer­tainty. There is no cer­tainty! Oh dear.

    So, my posi­tion is: Beware of the bull­shit aka the snake oil of the the­ory that will bring ‘risk-free’ rewards and life, for we are, life is, entrenched in risk; I say, enjoy the risk by learn­ing what it is and why it is as the nec­es­sary state of exis­tence. You can­not extract from the Laws of Risk; they are Uni­ver­sal; the answer is to seek the higher Laws.

    How many of our own kind did we proudly mur­der in the 20th Cen­tury? ~500 mil­lions? And how many will we geno­cide in this 21st. Cen­tury? All because of super­sti­tion, dogma, igno­rance, eco­nomic theory(s); our fears and our cow­ardice and our refusal to leave Plato’s Cave (the col­lec­tive) and stand alone as indi­vid­u­als. Our sci­en­tific insti­tu­tions don’t even know what water is, nor that which com­prises our atmos­phere, what is can­cer, what causes dia­betes? Oh, those gov­ern­ment grants and how attrac­tive the pub­lic purse really is in the Land of the Wiz­ards of OZ.

    Thank you @Lyonwiss.

    @Koonyeow Jan­u­ary 1, 2013 at 3:19 am | #

    LOL I see that you would enjoy see­ing me burn at the stake for heresy — thank you, as I am proud that I have attained the hum­bled state of the Heretic.

    How­ever, like those gone before me, I walk on the shoul­ders of many giants; those who have had the integrity and deter­mi­na­tion to san­i­tize the con­sen­sual pol­lu­tion and sewage in order to see beyond, towards the Uni­ver­sal Prin­ci­ples and into the realm of func­tional consciousness.

    Maybe 2013 may be a bet­ter year for you, h’mmm?

    Ho hum

  19. koonyeow says:

    Title: A Per­sonal (And Final) Appeal

    Peterjb,

    Please don’t waste your life drown­ing in post-modernism. Start walk­ing like a Roman stoic before walk­ing on shoul­ders of giants.

    I have no desire to burn you at the stake (my desire is reserved for ladies only). I will only burn those peo­ple who put Galileo under house arrest, if I can go back in time.

  20. ceviche says:

    Good that there is some inter­est in Min­sky devel­op­ment, but as i wrote else­where (debunk­ing site), Min­sky would be bet­ter and more likely to be suc­cess­ful if it was more ori­ented to be easy to under­stand for those who are new to it.
    I agree in gen­eral with Den­nis’ com­ments of Dec 20.
    I would add that Yamaguchi’s book which uses Ven­sim shows that good mod­el­ling can be done with avail­able tools.
    What Min­sky needs to do is to deter­mine where to sit­u­ate itself in the field of mod­el­ling tools, eg be stand-alone or become a model add-on to Ven­sim or.…
    Is it in the dynamic sys­tems field or the sys­tem dynam­ics field (they are dif­fer­ent):
    http://www.systemdynamics.org/conferences/2004/SDS_2004/PAPERS/347OSIPE.pdf
    or should it extend these to agent based
    http://www.systemdynamics.org/conferences/2009/proceed/papers/P1280.pdf
    or should it allow for­mu­la­tion as dif­fer­ence equa­tions, which are eas­ier to teach than (ordi­nary) dif­fer­en­tial equa­tions?
    Since most (all eco­nomic?) dynamic sys­tems are unsta­ble and likely to give results which have wide out­come ranges, what pre­ci­sion is there in an ODE basis that is likely to out­per­form a sim­pler God­ley table and dif­fer­ence equa­tion basis with short period com­pu­ta­tions (weekly) that are hid­den back­ground to pre­dic­tions (quar­terly or annual)?

    Hav­ing said that the value of Min­sky is that it directly allows the ODEs which Steve has already devel­oped to demon­strate that changes in the level of debt financ­ing are crit­i­cal com­po­nents of effec­tive demand that can­not be overlooked.

  21. Pragmatist says:

    Hi Steve,

    Your mul­ti­sec­to­r­ial eco­nomic analy­sis appears to be approx­i­mately anal­o­gous to finite-element mod­el­ling, as used in engi­neer­ing to “solve” dynamic or inde­ter­mi­nant sta­tic prob­lems. There is con­sid­er­able exper­tise within engi­neer­ing (par­tic­u­larly mechan­i­cal and aero­nau­ti­cal engi­neer­ing) for devel­op­ment, cal­i­bra­tion and com­pu­ta­tional opti­mi­sa­tion of these soft­ware tools.

    As many oth­ers have already pointed out, a major chal­lenge that you face with this task is to get the required inter­ested and under­stand­ing from the non-economics types out there. To help with this, have you con­sid­ered encour­ag­ing a side devel­op­ment group to use your sim­u­la­tion soft­ware as the engine for an eco­nom­ics sim­u­la­tion game? I’ve just sent you an email with this idea.

  22. Steve Keen says:

    Hi Prag­ma­tist

    It’s a good idea, but like so many such things it takes time that I alone don’t have.

    We’re try­ing to estab­lish a user com­mu­nity around Min­sky, so I hope that at some point some­one decides to do that.

    Thanks for the tip re finite ele­ment mod­el­ing. I have heard of it and did see some exam­ples years ago.

  23. Pragmatist says:

    It’s not time I’m sug­gest­ing you or your team devote to it. My expec­ta­tion is that the com­mu­nity that would build around an open-source game would be very dif­fer­ent to the team that will build around Min­sky. While there would cer­tainly be cross-pollination, it’s unlikely that one would “steal” peo­ple or effort from the other. For exam­ple, I can see my stu­dents being inter­ested in get­ting involved with devel­op­ing a game (even a nerdy eco­nomic sim game) but not a pure research tool like Min­sky. If you give the nod, I’ll put it to them as an idea that they may take up (with no detri­ment to your core project).

    Up to you of course — it’s your baby.

    I have some per­sonal expe­ri­ence (admit­edly, a while ago) in finite ele­ment mod­el­ing, espe­cially in com­pu­ta­tional fluid dynam­ics (CFD). Please let me know if I can lend a hand, even if just a dis­cus­sion for you to deter­mine if it’s worth your explor­ing any further.

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