Kickstart Minsky Now!

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Minsky: Stability is Destabilizing

The Kickstarter campaign to raise funds to further develop “Minsky“, my dynamic monetary simulation program, has been launched. The immediate objective is to raise $50,000, which will enable the current version of Minsky to be completed. The ultimate goal is to raise $1 million or more to fully develop the concept.

Click here for the Kickstarter campaign. If you have appreciated my work over the last seven years to warn about the economic crisis, to develop an approach to macroeconomics that can understand why it happened, and to develop policies that might help end it, the please show this by making a pledge.

Let your network know about it too. The more people who kick in, the better.

Some key facts about Kickstarter campaigns:

  • They run only for a set number of days: this campaign will end on March 18. If you don’t give by then, you can’t give later. So if you want to help, pledge now.
  • Pledging early is a very good idea. The faster a project reaches its target, generally the more it raises–there is a “bandwagon” effect amongst Kickstarters. Also, a fast-rising project tends to get selected by Kickstarter staff as a “Staff Pick”. That gives it more publicity and raises yet more funds.
  • Pledging is easy. You choose the amount you want to pledge and click. That takes you to an Amazon page where, if you’ve ever bought anything from them beforehand, you already have an account. Confirm the pledge there, and that’s it. If the project gets its target amount of money or more, then at the end of the campaign (some time around March 20) the amount you pledge will be transferred to the Minsky project by Amazon (minus about 10% representing Amazon and Kickstarter’s fees).

I have great hopes for this program. As a teaching tool, I hope it will excite young economists and entice them away from the static, equilibrium-fixated, barter model they are currently taught in Universities around the world. As a research tool, I hope it will develop in the same way that Lorenz’s model of fluid dynamics did, from a “toy” model to the basis of modern weather forecasting. The economics could never be forecast as the weather is, obviously. But explicitly acknowledging the complex, monetary, non-equilibrium nature of the economy has to make for a better economics.

Help me realize those hopes by providing the funding needed to take the program to its full potential. Kickstart Minsky Now!

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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17 Responses to Kickstart Minsky Now!

  1. peterjb says:

    @ Professor Keen (above)

    You state: “The economics could never be forecast as the weather is, obviously.”

    Again you are so wrong, for the predictions of forecast in Economics is precisely the same as they are for weather. Same and identical problems actually: presentation focused on “entertainment value”; protection of the institutional priesthood, a priori; preference for mediocrity, dogma and sniveling consensualism in the roll-the-eyes collectivist “faith based hierarchical tenure model”.

    Please consider that thee are three large weather forecasting endeavors in the World: 1. UK, 2. France and 3. Geneva. Yep, all three are staffed with blood sucking hierarchical bureaucrats that dribble on about science, without the science, in fact. Algorithms, codex, statistics, etc., (to impress the politicians) but in the end, it is all just plain guess work and ill-founded opinion.

    Yep, just like Economics.

    It is IMPOSSIBLE for any institution, even the above, to predict over time, the weather 24 hours in advance with a 57.5% probability of accuracy.

    And, this is with billions of dollars employed in super-computers, in each organization, that in the main, load actual statistical accounts of past weather conditions in their on-line Libraries. For their Godhead prophesies, computer programs actually just compare the stored known past events with current events, never look out a window, and sell their comparative guesses to other institutionally obedient and blind suckers for them to pedal.

    So, au contraire, Economics predictions are exactly as weather predictions, which should be replaced in both cases, by just looking out the window and being reasonably aware and well read.

    ???? – ????

  2. Bhaskara II says:

    Peter,

    Some weather reporting and predictions can be very good! Very good. Over a few days to a lesser degree a week. Check out some of the better weather web sites with the most information including satellite pictures, radar, weather maps with wind speeds and directions, temperatures, pressures, moisture and computer models with real input. I have been amazed. Learn the symbols on the map.

    I challenge you if you find such a thing for your area to keep log of the predictions and what you encounter outside. If you are fortunate to have modern weather info you might be pleased. Just print up the report and predictions daily or save the web page and check off a match of the actual weather and log the deviations. I have have been pleased with the accuracy. Now if some one tells me its gonna rain tomorrow it usually does almost with out fail.

    Don’t let economists and the sorry state of economics give modern weather reports and forecasts a bad name!

  3. TruthIsThereIsNoTruth says:

    pjb, sorry but by saying things like the weather 24 hours in advance with a 57.5% probability of accuracy, you’re a pot pointing out the kettles soot marks…

    How could you possibly get such an accurate statistic (implictly to 1dp%). Even if some phd went and did a study, it would be no more than some sample with a myriad of assumptions and definitions to arrive at what in the end is an arbitrary number.

    But you do point out something important. Given what is happening with the climate and the impact it can have on the welfare of human beings, meteorology is one of the most important fields of study with respect to improving human welfare. But as is human, individuals will drive out their newly washed car into the rain and blame the weatherman for not “predicting” it.

    There is a great parallel to economics here. It is not the prediction on the direction of asset prices to benefit wealthy investors what economics is about. This is a public perception driven by the media, reflecting nothing more than human greed manifested in hunger for knowing where to best put their financial bets to increase wealth.

  4. pfitzsimmons says:

    I live in Massachusetts, USA where we were just hit with the worst snow storm in 34 years. The National Weather Service predicted all the storms major parameters (Area, snowfall, duration, arrival time, temperatures) with great accuracy allowing the State and cities to prepare in advance. The warning surely saved lives as well as money. The storm was not easy to foresee. It consisted of two independent weather events converging at the same time and place. Thirty-four years ago a similar storm shut the state down for a week with enormous losses to the State and private businesses when many thousands of abandoned cars clogged streets for days.

  5. tcgibian says:

    I hate to be the spoiler in this conversation, but as I understand it, Minsky is an economic model, not a climatological one.

    As a model, it will prove itself by its ability to explain past economic events and predict future ones. Clearly Neoclassical economics has failed in both these particulars. Steve Keen’s work has been the best approach so far to breaking out of the medieval mindset which commands the stage now.

    Well worth the contribution.

  6. TruthIsThereIsNoTruth says:

    Is Minsky a model or a framework for creating dynamic models?

  7. Derek R says:

    In the context of the KickStarter, Minsky is a program for creating dynamic economic models just as Excel is a program for creating spreadsheets. However in the wider context of economic history it is the economic model developed by Hyman Minsky to explain business cycles.

    So the answer to TITINT’s question is “both”. In fact it is possible to use the Minsky program to create instances of the Minsky model.

  8. Lyonwiss says:

    Weather forecasting and economic forecasting have completely different types of insurmountable hurdles.

    Weather forecasting is based on proven laws of physics, thermodynamics, hydrodynamics, fluid mechanics of turbulence etc. The equations are deterministic, which should have deterministic solutions, but do not, because the dynamics is unstable, stochastic or sensitive to initial conditions, as discovered by Lorenz. The source of intrinsic stochasticity is nonlinear interactions, leading to deterministic equations with chaotic solutions and hence long-term forecasts are impossible. Short-term weather forecasts may be OK. Climate models for long-term forecasts are snake-oil, particularly if over-sold.

    Economic forecasts are pure snake-oil, because there are no proven laws of economics. The only exact equations in economics are accounting identities. All so-called laws of economics are nothing more than hypotheses and assumptions, without empirical validity. The Phillips Curve, for example, has driven economics research for decades, is an empirical artefact, statistically insignificant, and repeatedly falsified in other datasets.

    All economic models include merely unproven hypotheses, such as Phillips Curve, to drive changes in the economy, much like the laws of motion in physics. The equations which determine economic forecasts are fantasies and therefore in relation to reality, they produce random-walk results. Hence even short-term economic forecasts are pathetic (eg the surprise negative GDP of the US in the last quarter). Long-term economic forecasts are impossible for other reasons I’m going to write about.

    Instead of building a crystal ball, it would be better to prove Minsky’s theory of instability by developing quantitative relationships, which are empirically verified. This is, at least, an essential first step in a Minsky macroeconomic model. More sophisticated equations and infrastructure are not the answer; correct equations which capture real economics are. Past and present efforts in economics research have been an enormous waste of resources.

  9. peterjb says:

    @Lyonwiss February 11, 2013 at 1:47 pm | #

    “Past and present efforts in economics research have been an enormous waste of resources.”

    It appears to me that the whole “Institutional Economics Endeavour” has been an enormous misguided adventure in building the most ludicrous institutional religion that civilization has ever yet imposed on humanity; an imposition with undefinable cost burns including the suffering of unnecessary human hurts and pain; war and genocide and more; and which have subverted the life course processes for the respect of intellect, science, innate intelligence and that chose a paper fiat as its God to be held on high, or else! All for the sake of the arrogance of an elite and their priority claim to grande ignorance – as the King of Kings for all Mankind.

    Yes, Weather Theory makes an attempt at utilizing some science despite the stochastic nature of its context. But not Economics, you either Believe (Oh Lordy) or are burned at the stake as a Heretic.

    Bottom line: It’s all witch doctor stuff and more mumbo jumbo equations built by the blind, masturbating an elephant will not improve anything much at all, au contraire, but, after all, who cares? Only Economists.

    Ho hum

  10. peterjb says:

    Correction:

    The above should read as:

    Yes, Weather Theory makes an attempt at utilizing some science despite the stochastic nature and other assumptions of instabilities, of its domain.

    Apologies.

  11. kalman says:

    Is anybody buying Gold or Silver now? I wish to protect against all the fiat currency’s depreciation in value? I wish to set aside some money/purchasing power for my retirement in 30+ years and I am looking for ideas to prevent inflation stealing my hard earned money over the long term. Any comments are welcome? Does Steve have any ideas on this?

  12. Eliot Clarke says:

    Seems like Noahopinion has finally posted about Minksy, deep in a post about how business cycles don’t seem to be cycles at all. Overall he seems to have been pretty civil about the Minsky tool, maybe the twitter exchange focused his mind, whatever.

    I would be interested on your analysis of the drivel from Lucas quoted within the article. And have you seen/heard of this Hidden semi-Markov model he’s banging on about?

    http://noahpinionblog.blogspot.co.uk/2013/02/is-business-cycle-cycle.html

    I don’t read Noahopinion regularly because I find his style of delibrate contradiction quite annoying and he builds strawman arguments like the best of the neo-lib trolls. He does however occasionally peak my interest with the scope of his posts, but still, I imagine he would be an incredibly irritating humaniod to meet in real life.

    Hope theres some light at the end of the tunnel with the whole UWS debacle.

  13. Steve Hummel says:

    Economics and society will never end “the business cycle” until the idea of individual monetary Grace is embraced. The relationships between the accumulation of technological progress, Finance’s dependence on the same for their power and profit, Finance’s monopoly on credit creation, the conventions of cost accounting and the inevitable reduction of individual demand occurring in profit making systems from all of these….must be looked at.

  14. Steve Hummel says:

    Wisdom is ethical chaos theory.

    Mathematics shall not cease from exploration
    And the end of all its exploring
    Will be to arrive where it started
    And know the place for the first time.

  15. Steve Hummel says:

    Wisdom is the higher order level of thinking (philosophy) and acting (policy) that integrates every mind it touches and every system it is applied to.

    We need that of course. But what we need even more are the most universal and powerful distillations of that Wisdom. I would assert that these are the natural ideas, values, purposes and especially the experiences/policies of:

    Faith as in Confidence
    Hope
    Love and
    A strong sense of Grace

    These are sketched out in my primer on them in regard to our money system and current financial crisis here:

    http://www.amazon.com/dp/1480115703

    This from the Introduction of another book I am writing entitled:

    Systems, Symmetry and Walking Sapience

    It is a two pole cosmos where the only thing more important to understand than the necessity of balance and symmetry in both poles is….honoring the essential hierarchy of importance of one pole over the other. Yes, it is a funny world….but a potentially glorious one also.

    Faith as in Confidence, Hope, Love and a strong sense of Grace are what is required for a healthy and capable Humanity. Without these distillations of Human Wisdom Man withers, dithers and devolves into homo economicus or some other stupidity or flaw. It is time to remember who and what we are and cultivate that instead of, and in addition to the other things we must be while we are here.

    Economics and most of Modernity are out of synch with humanity. Pre-modern, pre-scientific humanity had a faith with which it could generate confidence and hope both in this life and the next. Today we have neither. We have neither an economic system which is stable, securely able to provide well for the majority of individuals, nor enables us to have the time to adequately contemplate our existence, and modern life increasingly rarely recognizes that such an action is even of real value. We live in a spiritually de-nuded and thus individually impotent world that is also more often than not, intellectually and scientifically arrogant and ignorant.

    It is time for symmetry between the best of Man and his systems, most especially his economic, financial and monetary ones. This alignment of ideas, values, purposes and experiences is urgently necessary, and the only truly rational and humane course if we are to avoid the social chaos, conflict and death of innocents that converging crises will bring if we don’t.

    This is no mere moralistic or dogmatic call for everyone to behave better or to believe in a certain religious way. It is a call to re-craft our systems so that their policies honestly reflect the distillations of Wisdom in order to enable a walking sapience that raises the quality of everyday life to new and better levels. This Wisdom can integrate each and every scientific, intellectual and artistic discipline enabling their policy effects to ultimately reflect the Wisdom of Confidence, Hope, Love and Grace and so aid every Man and Woman in their personal responsibility of self development as well.

  16. Robert K says:

    Hello Kalman;
    Whatever opinions Steve may hold on the subject of currencies, in their store of
    value function (or lack thereof) he does not express them on this blog. I’m sure,
    as a longtime reader of this blog, you know what Steve’s primary areas of interest
    are. If you happen to be interested in the subject of gold (but not silver) in their
    present and future roles as media for the preservation of purchasing power over
    time, you can do no better than to go to the blog FOFOA, and read a post entitled
    “moneyness”. Good luck, it’s a long slog but worth the effort. Cheers.

  17. Steve Keen says:

    Thanks Eliot,

    It’s getting closer (the UWS light that is).

    I have read some of that literature; as usual it’s a way of imposing apparent aperiodic cyclicality on an equilibrium model.

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