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Top Economist Steve Keen sits down with Richard J. Murphy for an insightful conversation about why textbook economics so often fail in the real world and what to do instead. From the “theory of the second best” to the Cambridge Capital Controversies, from double-entry bookkeeping to sectoral balances, they unpack how bad assumptions create bad policy, and where Steve agrees with MMT on government money creation and where he pushes back on trade.

In this episode, you’ll hear:

✅ “Textbooks are teaching a lie”: how clean curves hide messy realities

✅ Why equilibrium thinking and perfect-competition myths mislead students and policymakers

✅ The second-best insight: removing one “distortion” can make outcomes worse

✅ Cambridge Capital Controversies and Samuelson’s quiet concession — and why it never reached textbooks

✅ Double-entry as first principles for money and macro, not supply–demand parables

✅ Where Steve aligns with MMT on deficits and money creation — and why he disputes “exports are a cost, imports a benefit”

✅ Climate economics under fire: why trivializing risk derails the response we need

✅ What Ravel brings to monetary and macro modeling (and what’s coming next)

Key insights:

• Start from accounting and definitions, not analogies.

• Sectoral balances are conservation laws: one sector’s surplus is another’s deficit.

• You can’t fix macro with micro parables; you need dynamic, accounting-consistent models.

• Honest economics welcomes critique — even of our own side — when the data and logic demand it.

What should Steve and Richard tackle next — deep dive on double-entry and Ravel, or a full episode on climate economics? Tell us below.

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Steve Keen — Website: https://stevekeen.com

Who are the guests?

Dr. Steve Keen is an economist known for accounting-consistent, dynamic models of money and debt, and the creator of the Minsky and Ravel tools. He challenges textbook myths with operational mechanics.

Prof. Richard Murphy, a political economist, author of the Funding the Future blog, and a long-time critic of the failed ideas driving our economy, known for clear explanations of how real-world accounts should shape economic debate.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the software discussed in this podcast — as a bonus if you’re accepted and join.)

#SteveKeen #Economics #DoubleEntry #RichardJMurphy #MMT #Ravel #CambridgeControversies #SecondBest #economicpolicy #economicrecovery #economicimpact

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

Top Economist Steve Keen explains how government money is actually created — and why most of the money in circulation still comes from private bank lending, not the printing press. With clear double-entry accounting and Ravel demos, Steve shows how deficits create deposits and reserves, why “reserves aren’t money,” and how open-market operations change the mix of assets without magic money trees or looming doomsday math.

In this breakdown, you’ll discover:

✅ Cash vs digital money: why the press in DC is a sideshow

✅ Government spending and taxes in the ledger: deposits up, taxes down — what really changes

✅ Reserves 101: what banks can and can’t do with them (and why they aren’t “spendable” money)

✅ Deficit mechanics: why deficits create both money and reserves, surpluses destroy them

✅ The eight entries you need to model government money creation (beyond simple double entry)

✅ Why “borrowed from the private sector” is an accounting myth in loanable-funds models

✅ How OMOs and QE actually work: when they create money, when they don’t

✅ The data picture: since 2000, most new money has been credit-backed (private), not fiscal

✅ Why government negative financial equity is normal — and necessary for private net financial assets

Key insights:

• Deficit is not a bug — it’s the feature that creates net financial assets for the private sector.

• Reserves are bank-to-central-bank balances; they support payments and bond settlement, not your latte.

• Open-market operations with non-banks can create money; purchases from banks swap assets inside the banking system.

• Loanable-funds thinking explodes government debt in theory because it excludes money creation in the first place.

• Accounting done properly shows government negative financial equity mirrors private positive equity.

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What did you think of the eight-entry walkthrough and the OMO/QE distinctions? Share your thoughts below.

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Who is Dr. Steve Keen?

Dr. Steve Keen is an economist known for accounting-consistent, data-driven models that explain how bank money, private debt, and policy operations shape the real economy. Creator of the Minsky and Ravel tools, he replaces classroom analogies with operational mechanics — essential for engineers, finance professionals, and anyone who wants clarity over ideology.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the software used in this video — as a bonus if you’re accepted and join.)

#usshutdown #finance #BankingSystem #QE #economics #money #Macroeconomics #government

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the economic visualization software used in this video — as a bonus if you’re accepted and join.)

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Top Economist Steve Keen exposes how “help-to-buy” style policies in Australia (and beyond) inflated house prices, enriched landlords, and pushed home ownership out of reach for younger generations. Using BIS data and Ravel demos, Steve shows why the real driver isn’t “shortage” — it’s mortgage debt growth and the political choice to treat housing as an asset class, not a basic need.

In this hard-hitting breakdown, you’ll discover:

✅ Why first-home buyer grants and LMI waivers pump prices instead of helping buyers

✅ How mortgage debt growth (and its acceleration) drives house prices in multiple countries

✅ Why the US subprime story is only mid-pack globally — and why Australia, Canada, NZ, UK went further

✅ The landlord windfall effect: policies that look helpful individually but are disastrous collectively

✅ Ownership reality check: outright owners down, mortgages and renters up since the late 1980s

✅ How “credit-based demand” props up GDP while trapping households in decades of debt

✅ Why politicians keep doing it — and what a price-down policy agenda would require

KEY INSIGHTS:

• Treating housing as an asset class has produced real house price rises of several multiples since the 1970s in most advanced economies.

• Rising mortgage debt causes rising house prices; the tightest links show up when you track changes in the change of mortgage debt.

• Australia repeatedly “saved” prices with grants and boosts, shifting credit cycles without fixing affordability.

• The result: fewer outright owners, more mortgaged households, more renters — and stagnation as income services debt instead of spending and investment.

This isn’t “supply and demand” on a whiteboard. It’s the math of bank-created credit meeting political incentives — and the bill landing on younger households.

Want to learn 50 years of real economics in 7 weeks?

Apply to Steve’s Seven-Week Rebel Economist Challenge: https://stevekeen.com

Bonus: Ravel access is included for accepted students who join.

What’s your view — should governments target lower house prices rather than “help-to-buy” boosts? Add your thoughts below.

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Who is Dr. Steve Keen?

Dr. Steve Keen is an economist known for accounting-consistent, data-driven models that explain how bank money and private debt drive booms, busts, and asset bubbles. Creator of the Minsky and Ravel tools, he focuses on real-world dynamics instead of textbook myths — essential for engineers, finance professionals, and anyone who wants operational clarity over ideology.

Learn 50+ Years of Economics in Only 7 Weeks, by applying here: https://www.stevekeen.com

(Plus get Ravel — the software used in this video — as a bonus if you’re accepted and join.)

#HousingCrisis #housingmarket #housingcrisis #FirstHomeBuyer #RealEstate #AssetInflation #SteveKeen #Ravel #Economics #CreditCycles