Steve Keen

4 days ago | threadreaderapp.com | Steve Keen

2/ Markets are complex, dynamic, and shaped by innovation, not static equilibrium. 3/ Power law distributions, not perfect competition, are the rule. 4/ Dominant firms can be efficient, and more firms don't always mean better outcomes. 5/ Income distribution shapes demand and market structure as much as preferences. 6/ We need economic models that reflect reality, not just elegant math. 7/ Policy should be grounded in evidence, not ideology.

5 days ago | threadreaderapp.com | Steve Keen

1/8 Trade deficits: Buffett warns they bleed national wealth. Mosler claims they boost real prosperity. Who’s right? My analysis settles this economic cage fight. 2/8 Buffett’s view: A trade deficit = "selling the farm." You exchange assets (bonds, land) for imports today. Over time, foreigners own your capital. Squanderville parable shows how complacency leads to colonization-by-purchase. 3/8 Mosler (MMT) counters: Wealth = your "pile of stuff." Imports grow that pile; exports shrink it.

1 week ago | threadreaderapp.com | Steve Keen

Jun 15 1/ Did you learn in economics that firms always face rising marginal costs as they produce more? The real world tells a different story. 2/ Empirical research shows most firms operate with constant or even falling marginal costs as output increases. Efficiency often rises as they approach capacity. 3/ Traditional models assume diminishing marginal productivity, but real businesses get more efficient, not less, with scale.

1 week ago | profstevekeen.substack.com | Steve Keen

Ted Cruz has claimed that the Federal Reserve should stop paying banks interest on Reserves:The Federal Reserve pays banks interest on reserves. For most of the history of The Fed, they never did that. But for a little over a decade, they have. Just eliminating that saves $1 trillion. (YouTube video embedded below)Figure 1: Cruz interviewed on CNBCWith a few caveats, Cruz is right. And the story of how The Fed got itself into this situation is a tale of gross incompetence.

1 week ago | threadreaderapp.com | Steve Keen

1/ Did you learn in economics that firms always face rising marginal costs as they produce more? The real world tells a different story. 2/ Empirical research shows most firms operate with constant or even falling marginal costs as output increases. Efficiency often rises as they approach capacity. 3/ Traditional models assume diminishing marginal productivity, but real businesses get more efficient, not less, with scale. 4/ So how do firms actually set prices?