Bernanke-Summers Debate II: Savings Glut, Investment Shortfall, Or Monty Python?

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A Twit­ter fol­lower accused me of being “a lit­tle nasty” with my last blog post (see Fig­ure 1). He was right, and I don’t apologize.

I’ve spent 40 years try­ing to high­light just how lim­ited the dom­i­nant ideas in eco­nom­ics are. But even I didn’t fully appre­ci­ate how tiny the intel­lec­tual gene pool behind these ideas was.

Then, as I started to write a post on the eco­nomic issues in the Bernanke-Summers debate, I re-read Sum­mers’ orig­i­nal sec­u­lar stag­na­tion post and real­ized that, not merely were the ideas com­ing from a sin­gle per­spec­tive, most of the major pro­po­nents of these ideas came not only from the same Uni­ver­sity (MIT), and even the same sem­i­nar (Class 14462, con­ducted by Stan­ley Fisher).

The Inbred Bernanke-Summers Debate On Secular Stagnation

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Ben Bernanke has recently started blog­ging (and tweet­ing), and his open­ing top­ics were why inter­est rates are so low around the world, and a cri­tique of Larry Sum­mers’ “sec­u­lar stag­na­tion” expla­na­tion for this phe­nom­e­non, and for per­sis­tent low growth since the finan­cial cri­sis. Sum­mers then replied to Bernanke’s argu­ment, and a debate was on.

Click here to read the rest of this post.


Demonstration of Minsky at UK System Dynamics Conference

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The UK Chap­ter of the Inter­na­tional Sys­tem Dynam­ics Soci­ety invited me to speak about my Min­sky soft­ware at its annual con­fer­ence on March 26. This is my talk, where I poked some fun at econ­o­mists and their igno­rance of sys­tem dynam­ics. The Pow­er­point file and Min­sky files used are down­load­able from here–see below the video.

Pow­er­point File

Use “right-click” and “Save as” to down­load these files, oth­er­wise your browser will fill up with XML code (since Min­sky saves in XML format):

Min­sky Sim­plest Bank­ing File

Min­sky For­mat­ting File

Min­sky Loan­able Funds file

The Fed Has Not Learnt From The Crisis

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The Finan­cial Cri­sis of 2007 was the near­est thing to a “Near Death Expe­ri­ence” that the Fed­eral Reserve could have had. One ordi­nar­ily expects some­one who has such an experience—exuberance behind the wheel that causes an almost fatal crash, a binge drink­ing escapade that ends up in the inten­sive care ward—to learn from it, and change their behav­iour in some pro­found way that makes a repeat event impossible.

Replay: Vincent Browne interview on the Euro in 2012

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A Twit­ter cor­re­spon­dent reminded me of this inter­view from two years ago in Ire­land, where the topic was pre­dom­i­nantly the Euro, the Maas­tricht Treaty, and the like­li­hood of a polit­i­cal break in Europe due to austerity.


The dis­cus­sion has quite a bit of rel­e­vance to what is hap­pen­ing in Greece now–and what may hap­pen in Spain later this year. Hence I thought it was worth re-posting it.

1890s March of the unemployed on Washington

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Dur­ing the 1890s Depres­sion, the busi­ness­man Jacob Coxey devel­oped the idea that the unem­ployed should be hired by the gov­ern­ment to work on the badly dilap­i­dated roads. His idea cul­mi­nated in a march on Wash­ing­ton by over 10,000 peo­ple, and his arrest for tram­pling Congress’s lawns. This 1994 doc­u­men­tary by the Mas­sil­lon Museum tells his story.

Jacob Coxey was rid­ing home one day and expe­ri­enced the poor con­di­tions of the road in the 1890s. He also saw many unem­ployed men walk­ing the streets look­ing for work. He had the idea to put unem­ployed men to work towards prob­lems like fix­ing roads. He took this idea and made the Good Roads Bill in 1892. He pre­sented it to Con­gress, but that’s as far as it went. He teamed up with Carl Browne.

Science Versus Pseudoscience

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I par­tic­i­pated in a very enjoy­able dis­cus­sion with philoso­pher Ken Gemes and sci­ence author David Boda­nis (author of e=mc2: A Biog­ra­phy of the world’s most famous equa­tion) on sci­ence ver­sus non-science–with par­tic­u­lar atten­tion to eco­nom­ics. You can lis­ten to the hour-long dis­cus­sion by click­ing on this link: Philosofa Pod­cast. The full episode details (includ­ing the pod­cast and a down­load­able MP3 file) are avail­able here: The Philosofa Episode 2: Sci­ence Ver­sus Pseu­do­science.

Should governments run surpluses?

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My talk at the “‘Eco­nom­ics With Jus­tice” sem­i­nar series at the The School of Eco­nomic Sci­ence in Man­dev­ille Place, Lon­don. I cover where the argu­ment for aus­ter­ity came from, a thought exper­i­ment about what will hap­pen when a gov­ern­ment runs a sus­tained sur­plus, and a model show­ing what hap­pens when the gov­ern­ment does run a surplus.

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Kingston Lectures on Endogenous Money & Modelling with Minsky

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These are two lec­tures on endoge­nous money in macro­eco­nom­ics from the Kingston Uni­ver­sity Polit­i­cal Econ­omy Mas­ters mod­ule “Eco­nomic Change and Ideas”, which I gave yes­ter­day (Fri­day March 6th). I will wait till next year before post­ing the entire lec­ture series, since I’m giv­ing them for the first time this year and they are a bit rough. But one stu­dent couldn’t make yes­ter­day, and I had two lec­tures in one day to make up for my absence next week when I’m attend­ing my niece’s wed­ding in Syd­ney. So these are posted for my absent stu­dent and any­one else who is interested.