🚨 My new working paper out today I propose a post-Keynesian, system-dynamics alternative to the New Keynesian DSGE model, one that produces business cycles and financial instability endogenously, without rational expectations or microfoundations. dx.doi.org/10.2139/ssrn... 🧵1/8

In system dynamics, stocks and flows create a system's behaviour, but they don’t operate in isolation. They sit inside webs of interacting feedback loops. Feedback is simply information about what’s happening in the system’s stocks, fed back to influence its flows. 🧵1/10

Here's an interesting little graph of corporate profits as created from the Levy-Kalecki Equation (Blue) and the NIPA (Red). It looks like the trend is upward since 2000. (fred.stlouisfed.org/graph/?g=qKZG#0 )

"I sometimes think that economists use decimal points in their forecasts to prove they have a sense of humor." -William E. Simon Gazette-Times, Corvallis, OR (1975)

Adam Smith's concept of invisible hands working behind the scenes is, in the case of China, replaced by the thousand arm Buddha's extended and very visible hands" -Keyu Jin The New China Playbook: Beyond Socialism & Capitalism (2023)

"Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I try to keep it out of my papers." -Robert Solow AEA Panel Discussion (1966)

You'd think the field that studies money would have a solid grasp of how it works. But mainstream economics still teaches that banks are intermediaries, loans come from savings, and governments can run out of money. None of that sh#t holds up. 🧵1/12

@relearningecon.bsky.social 🤓😑 How are YOU doing?

Teaching undergrads rational expectations should count as academic malpractice. Modeling with it is like designing a unicorn and then asking why real horses don’t have horns. Might as well just start with the horse.

Mainstream macro blames crises on public debt or bad policy. History tells a different story, The biggest crashes follow private debt booms , when households & firms load up on credit faster than incomes grow. 🧵1/8

An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today." -Lawrence J. Peter

''The great tragedy of the global economic malaise is that it is caused by a shortage of something that is essentially costless to produce: money.'' -Steve Keen

“Such a secondary depression caused by an induced deflation should of course be prevented by appropriate monetary counter-measures. Though I am sometimes accused of having represented the deflationary cause of the business cycles as part of the curative process" -Friedrich Hayek

I'll probably get cancelled for this...🤷

''Even a modest Basic Income program could become a stepping-stone toward the most profound transformation of all: to unlatch work from livelihood entirely.'' -David Graeber

The economy isn’t “alive and well” in equilibrium—no more than a heart is when it flatlines. 😉 Like any complex system, it orbits strange attractors (and repellers), never truly at rest.

My dysfunctional relationship with economics that turned into a bizarre love story.😐 youtu.be/LktJHH9KDzc

"The decline of the West is not necessary or historically inevitable. It is the result of choosing policies dictated by its rentier interests." -Michael Hudson

“Separate two of the most important issues regarding entitlements: the government’s financial ability to pay and our economy’s productive capacity to deliver promised real benefits.” -Stephanie Kelton

"The myth that holds that the great corporation is the puppet of the market, the powerless servant of the consumer, is, in fact one of the devices by which its power is perpetuated." -John Kenneth Galbraith

"Economics limps along with one foot in untested hypotheses and the other in untestable slogans." -Joan Robinson

People don't choose tyranny because they love oppression, they choose it because freedom becomes psychologically unbearable.

"One might even say that it's one of the scandals of capitalism that most capitalist firms, internally, operate communistically." -David Graeber

We’re going live June 30th! Public talk on our youtube channel 'Michael Hudson in conversation with Steve Keen & Hannah Appel' Subscribe to the event! (in the comment)

"There are essentially two types of society: mixed economies with public checks and balances, and oligarchies that dismantle and privatize the state, taking over its monetary and credit system, the land and basic infrastructure." -Michael Hudson

"In a sense the budget deficit can be considered as an artificial export surplus." -Michał Kalecki

Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist." -Kenneth Boulding

"There is one good thing about Marx: he was not a Keynesian." -Murray Rothbard (Gotta keep my Austrian peeps happy 😉)

On 30th June, we host an event with Michael Hudson, Steve Keen and Hannah Appel. They will discuss Debt, Empire and the future. The event will be streamed live on our Youtube page. Come along! www.youtube.com/live/FAgj66z...

Should I mention that most economists at the Mises Institute have beards.🤔

“In fact, there is not a single key technology behind the iPhone that has not been State-funded.” -Mariana Mazzucato

"The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes." -John Maynard Keynes

Got any ideas why this shift is taking place?

"How can great minds be produced in a country where the test of a great mind is agreeing in the opinions of small minds?" -John Stuart Mill

"The worker has become a commodity, and it is a bit of luck for him if he can find a buyer, And the demand on which the life of the worker depends, depends on the whim of the rich and the capitalists." -Karl Marx

"Stability leads to instability. The more stable things become and the longer things are stable, the more unstable they will be when the crisis hits." -Hyman Minsky

“The debt isn’t the reason we can’t have nice things. Our broken thinking is. To fix our broken thinking, we need to overcome more than just an aversion to big numbers with the word debt attached.” -Stephanie Kelton

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"Money is nothing more than a form of debt, which is to say a commitment to pay money at some time in the future. The whole system is therefore fundamentally circular and self-referential. There is nothing underneath, as it were, holding it up." -Perry Mehrling

''The great dialectic in our time is not, as anciently and by some still supposed, between capital and labor; it is between economic enterprise and the state.'' -John Kenneth Galbraith

"In fact, our standard account of monetary history is precisely backwards. We did not begin with barter, discover money, and then eventually develop credit systems. It happened precisely the other way around." -David Graeber

"Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all." -Albert Einstein

"Some people believe you cure inflation by causing deflation. This is a little like suggesting that to cure a man who has been run over by an automobile going from north to south, you should run the car back over him again from south to north" -Ludwig von Mises

"But once we bring historical time into the argument, it is not so easy to present the free play of the market as an ideal mechanism for maximizing welfare and securing social justice." -Joan Robinson

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"Those who obtain or inherit predatory wealth and privilege realize the ultimate means of imposing austerity and demolishing the power of democracies is deception and junk economics" -Michael Hudson

"Economics is not the Emperor of the social sciences, but the Humpty Dumpty." -Steve Keen

I found the perfect frontier for love...😐