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This page lists and links to my academic papers. If you would like to support my research, please click on this link: Research Funding.

Research Financial Instability and Endogenous Money.

A monetary Minsky model of the Great Moderation & the Great Recession. This paper is forthcoming in the Journal of Economic Behavior and Organization. The simulations there are  slightly misleading since the initial conditions contained an inconsistency; these have since been corrected to yield the same long term outcome but far less volatile initial fluctuations. I'll publish the paper with these revised conditions shortly

A model of endogenous credit creation and a credit crunch. This paper is very technical and outlines my analysis of a credit crunch, which showpols that if that was the only problem we faced, a government rescue could work, and contrary to standard monetary theory (a.k.a. the "money multiplier" model) it would be much better to give the government money to debtors than to the banks. It also outlines my preliminary multisectoral monetary model of production. This paper was produced with the financial assistance of thePaul Woolley Centre for Capital Market Dysfunctionality at the University of Technology, Sydney.

Household Debt—the final stage in an artificially extended Ponzi Bubble, Australian Economic Review, Vol. 42 No. 3 September 2009, pp. 347–57. This paper shows that the growth in household debt was not an equilibrium response to falling interest rates, but a Ponzi speculative bubble whose bursting is causing a serious recession. I present a model of Minsky's "Financial Instability Hypothesis" that includes Ponzi finance as well as productive investment; the model generates a Depression when debt accumulated for speculative purposes overwhelms the productive capacity of the economy.

The Dynamics of the Monetary Circuit, in The Political Economy Of Monetary Circuits: Tradition And Change In Post-Keynesian Economics, edited by Jean-François Ponsot and Sergio Rossi (Palgrave, 2009, pp. 161-187). This is a reasonably accessible explanation of the technique I use to derive dynamic models of finance, and advocacy of continuous time methods over the discrete time approach that dominates Post Keynesian economics today.

Bailing out the Titanic with a ThimbleEconomic Analysis and Policy, Vol 39 Issue 1, pp. 3-24. Unlike most refereed academic journals, this one is freely accessible online. In this paper I explain why I don't expect the bailouts to work, I present a model of a credit crunch in a pure credit economy where the credit crunch alone causes a Great Depression.

My PhD thesis Economic Growth and Financial Instability (UNSW, 1997).

Using Mathcad in Economic Analysis

This article, on Hearne Scientific Software's website, explains my use of Mathcad for both data analysis and modelling.

The Nonlinear Dynamics of Debt Deflation. This technical paper gives a mathematical model of Minsky's Financial Instability Hypothesis. It includes an extended model with a government sector that can contain the process of private debt accumulation, and a preliminary attempt to model price dynamics

The Nonlinear Economics of Debt Deflation. This technical paper also has a government sector extension to the basic non-monetary Minsky model from my 1995 paper, and shows that under some circumstances there is a bifurcation in government debt when stabilizing an unstable economy: in some circumstances, both private debt and government debt stabilize as a percentage of GDP, but in others runaway government debt is needed to stabilize private debt.

The non-conservation of money

The process of endogenous money creation

The "Financial Instability Hypothesis"

Expert Opinion on Ponzi Loans

Other Topics

I'll gradually link all my academic papers here, since journals now seem comfortable about academics linking their papers on their own websites.


Worrying trends in econophysics. Mauro Gallegati, Steve Keen, Thomas Lux, Paul Ormerod, (2006). "Worrying trends in econophysics", Physica A 370, pp. 1–6.


A Marx for Post Keynesians; unpublished

The Misinterpretation of Marx's Theory of Value; Journal of the History of Economic Thought, 15 (2), Fall, 282-300

Use-value, exchange-value, and the demise of Marx's Labour Theory of Value; Journal of the History of Economic Thought, 15 (1), Spring, 107-121

Use, Value and Exchange: The Misinterpretation of Marx; my Masters thesis on Marx, UNSW 1990; unpublished

Theory of the Firm

The conventional theory of competition is nonsense. I explain why in Chapter 4 of Debunking Economics, "Size Does Matter". A more technical explanation is given in this paper:

Steve Keen (2004). “Deregulator: Judgment Day for Microeconomics”, Utilities Policy, 12: 109 –125

This only covers the Marshallian theory however. More detailed critiques that are relevant to the Cournot model as well are published here:

Steve Keen and Russell Standish, (2006). “Profit Maximization, Industry Structure, and Competition: A critique of neoclassical theory”, Physica A 370: 81-85

Steve Keen and Russell Standish, (2010). "Debunking the theory of the firm—a chronology", real-world economics review, issue no. 53, 26 June 2010, pp. 56-94,

This paper gives a complete chronologically laid out coverage of our critique, from its beginnings when writing Debunking Economics to a demonstration that the Cournot-Nash equilibrium is meta-unstable.

Say's Law

"Nudge Nudge, Wink Wink Say No More!” in Steve Kates (ed.), Two Hun­dred Years of Say’s Law, Edward Elgar, Alder­shot, pp. 199–209.

Transna­tional cor­po­ra­tions and aggre­gate demand

The relo­ca­tion of pro­duc­tion and aggre­gate demand (Tech­ni­cal Appen­dix)

30 Responses to Research

  1. John Hawkins says:

    I think accord­ing to your def­i­n­i­tion that this would be the “veloc­ity” of money as Richard is think­ing of it.–01-01&coed=2012–08-22&line_color=%230000ff&link_values=&mark_type=NONE&mw=4&line_style=Solid&lw=1&vintage_date=2012–08-29_2012-08-29_2012-08–29&revision_date=2012–08-29_2012-08-29_2012-08–29&mma=0&nd=__&ost=&oet=&fml=a%2F%28b%2Bc%29&fq=Quarterly&fam=avg&fgst=lin

    or it’s pos­si­ble he may be think­ing more along the lines of the Mar­ginal Prod­uct of Debt which has been made famous in many “debt sat­u­ra­tion” pre­sen­ta­tions (change in gdp / change in debt)–01-01&coed=2012–04-01&line_color=%230000ff&link_values=&mark_type=NONE&mw=4&line_style=Solid&lw=1&vintage_date=2012–08-29_2012-08–29&revision_date=2012–08-29_2012-08–29&mma=0&nd=_&ost=&oet=&fml=a%2Fb&fq=Quarterly&fam=avg&fgst=lin

    Either way, they are hardly con­stant so it would be hard to plug it into a formula

  2. Robin Northcott says:

    Hi Steve,

    I’m con­fused about the sec­ond model in the first paper here (the extended God­ley model includ­ing debt). It looks to me like there is an inconsistency.

    Eqn 1.4 (rearranged) gives Y = Pi + w.L + r.D
    but Y must also be Y = w.L + I (every­thing is bought either for con­sump­tion or invest­ment).
    Sub­sti­tut­ing Eqn 1.3 in this eqn gives Y = w.L + Pi + dD/dt
    So dD/dt = r.D which seems a strange restric­tion and not actu­ally in the model so far as I can tell.

    I’m prob­a­bly just miss­ing some­thing here but an expla­na­tion would be great.



  3. Robin Northcott says:

    Think­ing about this a bit more I think I may under­stand what’s going on.
    Work­ers must be sav­ing (to lend to firms) so the con­sump­tion equa­tion becomes (adding inter­est pay­ments to work­ers income)
    Y = (1-S).(w.L+r.D) + I = (1-S).(w.L+r.D) + Pi + dD/dt
    =Pi + w.L + r.D + dD/dt — S.(w.L + r.D)
    so look­ing at eqn 1.4 again we get:
    dD/dt = S.(w.L + r.D) (which now seems pretty obvious)

  4. Rojonia says:

    Dear Steve:

    I have been work­ing recently on an extended ver­sion of the Good­win model using meth­ods sim­i­lar to your own. Refer­ring to your paper from 1995 on your mod­i­fied Good­win model (pp.615–617), where invest­ment is a func­tion of profit rate, and there is no House­hold sav­ings (all worker income goes to con­sump­tion), I have the fol­low­ing com­ment:
    Unless I have mis­un­der­stood some­thing, it would seem that your model vio­lates the sec­tor bal­ance equa­tion, which is in this case:
    Y-WL-rD –I (pro­duc­tion sec­tor sur­plus)+ 0 (House­hold sec­tor sur­plus) + rD (Bank sec­tor sur­plus) =0.

    Thus I= Y-WL, or I=Y(1-W/a). Any other value of I would require House­hold sav­ings to be non-zero, vio­lat­ing the assump­tion of no House­hold sav­ings.
    I would very much like to hear your com­ment on this, as my model assumes that the sec­tor bal­ance equa­tion above must be sat­is­fied at all times, which gives a very dif­fer­ent result. Have I mis­un­der­stood some­thing?
    Look­ing for­ward to hear­ing from you.

    Best regards,

  5. Steve Keen says:

    Hi Rojo­nia,

    The model assumes that all non-investment out­put is con­sumed: it deter­mines Y and I but leaves C unspec­i­fied. It is stock-flow con­sis­tent given that. Check for papers by Matheus Gras­selli and Bernardo Costa-Lima on this. Their research group is also work­ing on intro­duc­ing stocks so that both con­sump­tion and invest­ment can be deter­mined in a fully spec­i­fied model.

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