real-world economics review, issue no. 95 subscribe for free
From finance to climate crisis: An interview with Steve Keen Steve Keen and Jamie Morgan1 [University College London, UK; Leeds Beckett University Business School, UK] Copyright: Steve Keen and Jamie Morgan, 2021
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Steve Keen is Distinguished Research Fellow at the Institute for Strategy, Resilience and Security, University College London. Steve is one of the more publicly engaged PostKeynesians and first came to prominence with the publication of his book, Debunking Economics (Keen, 2001, 2011), which provides a wide-ranging critique of the assumptions, mathematical incoherencies, conceptual inconsistencies, and adverse socio-economic consequences of “neoclassical economics” – a dominant strain of mainstream economics whose influence spreads further than merely those who self-identify as neoclassical economists. In terms of his own theoretical contributions, he is best known for his work on the macroeconomic significance of private debt – banking practices, financial asset expansion and debt-deflation in the tradition of Hyman Minsky, Irving Fisher etc. Work from this perspective proved particularly timely – putting Steve in a position to identify the underlying tendencies that would eventually manifest as the “Global Financial Crisis” (GFC), 2007-8. Steve first started to draw attention to problems in late 2005 and readers of Real-World Economics Review voted him recipient of the “Revere Award” for this in 2010 (and Alan Greenspan was awarded the matching “Dynamite Award”). Steve’s subsequent Minsky software package project (see https://sourceforge.net/projects/minsky/) provides a free, Open 2 Access alternative to mainstream macroeconomic modelling tools like Dynare and GAMS. Steve has published numerous papers (e.g. Keen, 2017a; Gallegati et al., 2006; Keen, 2014; Keen, 1993). Some of this work is collected in Developing an Economics for the Post-Crisis World (Keen, 2016). He has also published a further book on his central themes – Can We Avoid Another Financial Crisis? (Keen, 2017b). In recent years, Steve has become increasingly interested in mainstream environmental economics and increasingly influenced by its alternative, ecological economics. His most recent work provides a systematic critique of mainstream economic work on climate change, particularly “Integrated Assessment Models” (IAMs), of which the best known are the “Dynamic Integrated Model of Climate and the Economy” (DICE) variety (e.g. Keen, 2020a; Keen et al, 2019; Asefi-Najafabady et al., 2020). These models have influenced the Intergovernmental Panel on Climate Change (IPCC) and play a role in informing policy for mitigation and adaptation. Many climate and Earth system scientists (and increasingly so) are sceptical regarding these models, but it was mainly for his work on them that William Nordhaus received the “Sveridges Riksbank Prize in 3 Economic Sciences in Memory of Alfred Nobel” (jointly with Paul Romer) in 2018.
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debunking@gmail.com www.isrs.org.uk https://sourceforge.net/projects/minsky/ 3 See https://www.nobelprize.org/prizes/economic-sciences/2018/summary/ Note: The original prizes were initiated in 1901, economics is not a “Nobel Prize”, it is an addition. According to the Nobel Prize organization: “In 1968, Sveriges Riksbank (Sweden’s central bank) established the Prize in Economic Sciences in Memory of Alfred Nobel, founder of the Nobel Prize. The Prize is based on a donation received by the Nobel Foundation in 1968 from Sveriges Riksbank on the occasion of the Bank’s 300th anniversary. The first Prize in Economic Sciences was awarded to Ragnar Frisch and Jan Tinbergen in 1969.” https://www.nobelprize.org/prizes/economic-sciences/ 2
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