The Most Important Econoblog Post This Year: The Steve Keen/MMT Convergence
Neil Wilson has done yeoman’s duty to (perhaps) achieve a convergence that has been too-long delayed.
A Double Entry View on the Keen Circuit Model.
Steve Keen is, to my knowledge, the only person who is actually encoding a Godley-esque, MMT-style, accounting-based, stock-flow-consistent dynamic simulation model of how economies work. But many MMTers have been quite hostile or at least resistant to Steve’s work, based on some different concepts of endogenous/exogenous money, and — this may seem trivial but it isn’t, at least as it has played out over time — based on details of single- versus double-entry accounting.
The debate has been quite acrimonious at times, and that acrimony has greatly hindered a convergence that in my eyes would be the most salutary event possible in the development of economic thinking and practice.
You can read the details in Neil’s post, but in short he’s re-jiggered Steve’s accounts to make them conform better to (at least Neil’s view of) standard bank-accounting practices. I’m not qualified to evaluate his new formulation, but I am excited to read Neil’s comment on the post, replying to uber-MMTer Scott Fullwiler:
We need to get all this pulled together into a coherent overall model.
Steve’s up for it. I hope you are too.
I’ll just say: I’m very much up for watching it happen.
Also: run don’t walk to read Steve’s Debtwatch Manifesto, posted last week.
Cross-posted at Asymptosis.
With no background in economics, math or accounting I can’t tell the difference btwn MMT and Steve Keen’s work – instead I simply see the logic of the larger MMT/Keen concepts. Thankfully, since I found MMT before Steve’s blog, and Steve’s blog before I heard he wasn’t an approved MMTer, I got to read things like his brilliant “manifesto” without prejudice… at least the parts I can understand – which is a lot, and that is one of the reasons I like Steve Keen so much – he can dumb it down just enough that even I’m now in on this little secret that Gov debt isn’t the same as household debt and what that means for our economy.
Aside from a few MMT bloggers ,most econ blogs seem to be ignoring Steve Keen just as they are ignoring MMT. They must have seen the convergence early on. Too bad.
Well we’re not there yet since Keen hasn’t yet embraced or incorporated the MMT view of the vertical channel (govt spending/taxing), but yes, big progress.
WH10: I can’t find it, but I did see a comment of Steve’s quite clearly saying that he wanted to incorporate this.
Main thing is to see folks working together to build out the model(s?) without getting their knickers all in a twist.