Steve Keen – A First Principles approach to Energy, Environment, and Money in Macroeconomics

This talk at the European Central Bank covers the failure of economic theorists of all persuasions, not only Neoclassical, to properly incorporate energy into their models of production, and the failure of Neoclassical economists to properly incorporate money and credit.

In both cases, I show that there is an easy way to overcome this deficiency: to treat Energy as an input into Labour and Capital, without which neither can function; and to model capitalism as a monetary system in which bank lending creates both new money and demand.

There’s an extensive discussion with the audience (of about 30 EBC staff). I hope the audio is OK: my answers should be easy to hear, if not some of the questions.

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