Loanable Funds vs. Endogenous Money: Krugman is Wrong, Keen is Right

Egmont Kakarot-Handtke ()

MPRA Paper from University Library of Munich, Germany

Abstract: In a recent article, Keen resumes the debate with Krugman about the effects of debt upon the economy. It is hard to see how the question can be settled as long as all participants apply their idiosyncratic models. Hence the issue boils down, as Krugman rightly put it, to the deeper question: “how should one do economics.” Sketched with a broad brush, the consensus is that Orthodoxy has failed and that Heterodoxy has no convincing alternative to offer. The conceptual consequence of the present paper is to restart from a firm common formal ground. This relocation makes the debate solvable.

Keywords: new framework of concepts; structure-centric; axiom set; consumption economy; debt; Profit Law; simulation; market clearing; budget balancing (search for similar items in EconPapers)
JEL-codes: B59 E21 G00 (search for similar items in EconPapers)
Date: 2014-02-03
New Economics Papers: this item is included in nep-mac and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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