The reductionism stops here

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One of the defin­ing fea­tures of neo­clas­si­cal eco­nom­ics is the belief that macro­eco­nomic analy­sis has to be not merely com­pat­i­ble with, but deriv­able from, micro­eco­nomic analy­sis. The devel­op­ment of eco­nomic the­ory has been dri­ven far more by this belief than by the desire to make the the­ory com­pat­i­ble with the observed behav­iour of the economy.

Will the Australian house price souffle rise twice? (1)

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One of the advan­tages of being over­seas right now is that it takes less effort to avoid lis­ten­ing to the insipid dis­course that passes for polit­i­cal debate dur­ing this Aus­tralian elec­tion. As Kevin Rudd and Tony Abbott com­pete over who can be more obnox­ious to refugees, I find myself pin­ing for the days of sen­si­ble and humane poli­cies under Mal­colm Fraser. As politi­cians make them­selves the butt of their own unin­ten­tional sup­pos­i­tory jokes, I pine for some­one who could deliver a killer line against his oppo­nent, rather than against him­self: Paul Keating.

15 Easy Minsky Pieces

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Dr. Rus­sell Stan­dish and I have been work­ing on Min­sky now for almost two years now–ever since we received the $125K from INET’s Spring 2011 grant round: Rus­sell as builder (cod­ing in C++ and Tcl/Tk) and me as archi­tect (play­ing with each release, spot­ting bugs and sug­gest­ing fea­tures). It’s been a part-time endeavor: Rus­sell, as a con­tract pro­gram­mer, has to keep more than one iron in the fire, while I have a fair few balls in the air myself. Rus­sell has put in about 2000 hours of cod­ing over that time, and we still have funds to sup­port about another 250 hours after the suc­cess­ful Kick­starter cam­paign ear­lier this year.

Minsky Release Candidate Available

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The lat­est “Petty” ver­sion of Min­sky finally qual­i­fies as a 1.0 release: there are enough sys­tem dynamic and user-interface fea­tures in it to declare it a sta­ble release. We’ll mod­ify it to remove any bugs that are identified–and I just spot­ted one inter­mit­tent one involv­ing wiring (see https://sourceforge.net/p/minsky/tickets/324/)–but oth­er­wise this will remain a sta­ble release, with no new fea­tures to be added.

Who’s responsible for Australia’s ‘debt crisis’?

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Another elec­tion is on in Aus­tralia, and the topic du jour – the polit­i­cal topic du cen­tury it seems – is that, hor­ror of hor­rors, the government’s bud­get next year will be in deficit to the tune of $30 bil­lion! It’s a scan­dal! Our debt is bal­loon­ing! And it’s all Labor’s fault! Why, all you have to do is look at the respon­si­ble Howard period – falling debt – and com­pare it to the irre­spon­si­ble Labor period – ris­ing debt – and you know who to vote for, don’t you?

The self-destruction of Economics (3)

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This is the third arti­cle in a three-part series on the self-destruction of neo­clas­si­cal eco­nomic the­ory. See part one here and part two here.

To say that the long self-destruction of the aca­d­e­mic eco­nomic tra­di­tion was given a final push towards the cliff by the global finan­cial cri­sis paints a pretty bleak pic­ture of the future of the dis­mal sci­ence. But I can also see some rays of sunshine.

New York Times article

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Floyd Nor­ris, the chief finan­cial cor­re­spon­dent of the New York Times, has writ­ten an arti­cle enti­tled “The Time Bernanke Got It Wrong” on Bernanke’s sup­port of “poli­cies that allowed the dan­ger­ous imbal­ances to grow and bring on the cri­sis” in which he cites Hyman Min­sky and my work mod­el­ling Minsky’s Finan­cial Insta­bil­ity Hypothesis.