Comments on: Debt dynamics will hold back economy http://www.investmentpostcards.com/2009/11/13/debt-dynamics-will-hold-back-economy/ Prieur du Plessis’s international investment blog Sun, 29 Jan 2012 22:06:48 +0000 hourly 1 http://wordpress.org/?v=3.1.1 By: Paul Hanlyhttp://www.investmentpostcards.com/2009/11/13/debt-dynamics-will-hold-back-economy/comment-page-1/#comment-20058 Paul Hanly Fri, 13 Nov 2009 22:35:12 +0000 http://www.investmentpostcards.com/?p=13581#comment-20058 http://www.debtdeflation.com/blogs/ <a href="http://www.debtdeflation.com/blogs/" title="Steve Keen's Debtwatch" rel="nofollow"> has excellent analysis of both Australian and US debt to GDP ratios, debt productivity (how much extra GDP from an extra $1 of debt) and why the neo classical economists who got us into this mess didn't see it coming and are applying bandaids that will only make it worse eventually.His various blog entries have lots of graphs (such as this one on <a href="http://cdn.debtdeflation.com/blogs/wp-content/uploads/2009/10/image0061.gif" title="US Debt to GDP ratios" rel="nofollow">) and explain why deleveraging will reduce demand and increase unemployment, both dramatically, given how much debt increases have contributed to demand since 2004.Keen was one of only 11 (Now about 20) economists originally identified as having predicted the Great Recession with supporting analysis, theory and timeline.Keen argues that the economic models used fundamentally flawed as they ignore the role of debt and never predict a crisis because of their inherent assumptions. He follows <a href="http://en.wikipedia.org/wiki/Hyman_Minsky" title="Hyman Minsky's" rel="nofollow"> theories. http://www.debtdeflation.com/blogs/
has excellent analysis of both Australian and US debt to GDP ratios, debt productivity (how much extra GDP from an extra $1 of debt) and why the neo classical economists who got us into this mess didn’t see it coming and are applying bandaids that will only make it worse eventually.

His various blog entries have lots of graphs (such as this one on ) and explain why deleveraging will reduce demand and increase unemployment, both dramatically, given how much debt increases have contributed to demand since 2004.

Keen was one of only 11 (Now about 20) economists originally identified as having predicted the Great Recession with supporting analysis, theory and timeline.

Keen argues that the economic models used fundamentally flawed as they ignore the role of debt and never predict a crisis because of their inherent assumptions. He follows theories.

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