This is a talk by Steve Keen to the Heterodox Economics Students at Cambridge University, given on November 28th, 2012.
In the talk, Keen stresses the need for a monetary approach to macroeconomics. That is opposed to the “real” analysis so popular amongst neoclassicals, which essentially analyses modern economies as if there were barter systems.
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Judging from Keen's recent posts he also wants to model the 'real' side of the economy through the set of thermodynamic concepts (energy/entropy, work, etc), though I don't think this will be as successful as Keen's financial effective demand models.
ReplyDeleteI actually do not think that neoclassical economics could correctly model the 'real' as opposed to the 'monetary' economics either. It scarcely describes what Braudel called 'material life' as opposed to the 'games of exchange'. Just as there is a monetary, financial world where we live and function there is also a world underneath it where real production and reproduction happen. In the Bronze Age, whole civilizations depended on the scarce sources of tin. Now, oil and uranium, aluminium, titan and rare earth metals shape the modern history.