Steve Keen: Zombies-To-Be and the Walking Dead of Debt

Cross-posted from Naked Capitalism

Steve Keen, one of the short list of economists to warn of the coming of the financial crisis, gives a very fast paced and informative talk. He explains the workings of his economic model, which contrary to prevailing macroeconomic models, includes the role of banking and credit. He then identifies the conditions that lead to zombification: a rapid expansion of credit in an economy that already has a high debt load. He shows how merely stabilizing the level of debt to GDP leads to a serious economic contraction.

Using new BIS data, he then identifies a surprisingly long list of countries that are destined to become zombies. It’s not pretty.

 

2 thoughts on “Steve Keen: Zombies-To-Be and the Walking Dead of Debt

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s