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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)

32 Responses to Research

  1. John Hawkins says:
  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.

  6. HeribertoArribas says:

    Mr. Keen, a little joke:

    If Q is the sumatory from i = 1 to n the q_i and Q is a constant when n increase indefinitely q_i become zero.

    Then each firm facing a wonderfull horizontal demand POINT q_i = 0

  7. Steve Keen says:

    Nice one, thanks.

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