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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

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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

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

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

Top Economist Steve Keen challenges reasoning by analogy and shows how to analyze the economy from first principles — the way engineers and physicists think. Using double-entry bookkeeping and live Ravel demos, Steve dismantles textbook models like loanable funds, exposes why supply-and-demand curves don’t describe money creation, and builds a dynamic macro model from definitions, not assumptions.

In this eye-opening breakdown, you’ll discover:

✅ First principles vs analogy: why the engineer’s method beats classroom shortcuts

✅ Why the claim that countries are like households is a false analogy for deficits and debt

✅ The monetary system’s real foundations: double-entry bookkeeping, not supply and demand curves

✅ Ravel demo: taxation, reserves, and sectoral balances explained step by step

✅ Why a government surplus equals a private sector deficit, and why that matters

✅ A macro model from strict definitions: employment, wage share, private debt, deficit

✅ Credit’s central role in cycles, and its tight link with unemployment

✅ Why energy belongs inside production functions, grounded in thermodynamics

✅ How ideology keeps bad models alive, and how to replace them

Key insights:

• Engineer it, don’t analogize it: start from accounting identities and conservation laws.

• Sectoral balances: public saving, a surplus, reduces private net financial assets by the same amount.

• Money creation: banks do not use supply and demand curves; they use double-entry to create deposits when they lend.

• Dynamics over equilibrium: definitional dynamics generate cycles; equilibrium is a convenience fantasy.

• Credit drives cycles: credit and unemployment move in opposite directions.

• Energy is fundamental: changes in energy use track changes in global output remarkably closely.

New Book: Money and Macroeconomics from First Principles — for Elon Musk and Other Engineers

Built for engineers, quants, and practical thinkers who want accounting-consistent, physics-aware economics. Kindle available now; print coming soon.

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 did you think of the sectoral-balances demo and the household vs country analogy? Tell us below.

Subscribe for reality-based economics

Like if first-principles reasoning clarified deficits, money, and credit

Share to help others break free from bad analogies

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Who is Dr. Steve Keen?

Dr. Steve Keen is a globally recognized economist who replaces textbook abstractions with accounting-consistent and data-driven models. Creator of the Minsky and Ravel software tools, Steve’s work shows how bank money, private debt, and energy shape real-world cycles. If you think like an engineer or physicist and want operational clarity over ideology, this channel is for you.

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.)

#FirstPrinciples #SteveKeen #Ravel #SectoralBalances #MoneyCreation #DoubleEntry #Macroeconomics #Deficit #CreditCycles #EnergyEconomics

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

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

Top Economist Steve Keen challenges reasoning by analogy and shows how to analyze the economy from first principles — the way engineers and physicists think. Using double-entry bookkeeping and live Ravel demos, Steve dismantles textbook models like loanable funds, exposes why supply-and-demand curves don’t describe money creation, and builds a dynamic macro model from definitions, not assumptions.

In this eye-opening breakdown, you’ll discover:

✅ First principles vs analogy: why the engineer’s method beats classroom shortcuts

✅ Why the claim that countries are like households is a false analogy for deficits and debt

✅ The monetary system’s real foundations: double-entry bookkeeping, not supply and demand curves

✅ Ravel demo: taxation, reserves, and sectoral balances explained step by step

✅ Why a government surplus equals a private sector deficit, and why that matters

✅ A macro model from strict definitions: employment, wage share, private debt, deficit

✅ Credit’s central role in cycles, and its tight link with unemployment

✅ Why energy belongs inside production functions, grounded in thermodynamics

✅ How ideology keeps bad models alive, and how to replace them

Key insights:

• Engineer it, don’t analogize it: start from accounting identities and conservation laws.

• Sectoral balances: public saving, a surplus, reduces private net financial assets by the same amount.

• Money creation: banks do not use supply and demand curves; they use double-entry to create deposits when they lend.

• Dynamics over equilibrium: definitional dynamics generate cycles; equilibrium is a convenience fantasy.

• Credit drives cycles: credit and unemployment move in opposite directions.

• Energy is fundamental: changes in energy use track changes in global output remarkably closely.

New Book: Money and Macroeconomics from First Principles — for Elon Musk and Other Engineers

Built for engineers, quants, and practical thinkers who want accounting-consistent, physics-aware economics. Kindle available now; print coming soon.

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 did you think of the sectoral-balances demo and the household vs country analogy? Tell us below.

Subscribe for reality-based economics

Like if first-principles reasoning clarified deficits, money, and credit

Share to help others break free from bad analogies

-------

Who is Dr. Steve Keen?

Dr. Steve Keen is a globally recognized economist who replaces textbook abstractions with accounting-consistent and data-driven models. Creator of the Minsky and Ravel software tools, Steve’s work shows how bank money, private debt, and energy shape real-world cycles. If you think like an engineer or physicist and want operational clarity over ideology, this channel is for you.

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.)

#FirstPrinciples #SteveKeen #Ravel #SectoralBalances #MoneyCreation #DoubleEntry #Macroeconomics #Deficit #CreditCycles #EnergyEconomics

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

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

Top Economist Steve Keen dismantles the textbook “Money Multiplier” myth and shows—step by step—how banks actually create money using double-entry accounting. With evidence from the Bank of England (2014) and the Bundesbank (2017), Steve explains why mainstream models mislead students and policy makers, and demonstrates the real mechanics in Ravel.

In this eye-opening analysis, you’ll discover:

✅ What the Money Multiplier claims—and why it fails basic accounting

✅ How the Bank of England & Bundesbank debunked the textbook story

✅ A live Ravel demo: banks buying bonds vs. “lending from reserves”

✅ Why “loans in cash” is a 19th-century artifact, not modern banking

✅ How banks actually create deposits at the moment of lending

✅ Why ideology (not logic) keeps bad models in the curriculum

✅ The Bernanke–Friedman Great Depression narrative—and what it ignores

KEY INSIGHTS:

• Double-entry accounting test: assets − liabilities = equity must balance on every row—textbook Money Multiplier operations don’t.

• “Lending from reserves” breaks the books unless loans are paid entirely in cash—contrary to modern practice.

• Real-world banking: banks simultaneously mark up loans (asset) and deposits (liability). That’s how new money enters the system.

• Ignoring bank money creation leads economists to blame the state and miss private-credit cycles.

This isn’t theory vs. theory—it’s accounting vs. error. If you care about how money really enters the economy, you need the operational picture, not a classroom fable.

🎓 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 did you think of the Ravel demo and the accounting checks? Share your take in the comments!

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Website: https://stevekeen.com

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Who is Dr. Steve Keen?

Dr. Steve Keen is a leading economist known for challenging textbook myths with empirically grounded, accounting-consistent models of money and debt. A PhD economist and creator of the Minsky and Ravel tools, Steve has spent decades showing why private credit dynamics drive booms and busts—and why ignoring bank money creation leads policy astray. His work is essential for engineers, finance professionals, and technologists who want operational clarity rather than abstractions.

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 & join.)

#MoneyMultiplier #MoneyCreation #BankOfEngland #Bundesbank #DoubleEntry #Economics #SteveKeen #Ravel #Macroeconomics #BankingSystem

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

(Plus get Ravel™ - my proprietary economic visualization software I used in the videos - as a free bonus, if you get accepted & join.)

Top Economist Steve Keen reacts to Gary Stevenson’s viral “tax the rich” budget model—and shows where it breaks. The real blind spot? Treating government like a household and ignoring how banks, gilts, and central-bank reserves actually work. This isn’t just about taxes—it’s about the plumbing of money.

In this explosive breakdown, you’ll discover:

✅ Where Gary’s spreadsheet goes wrong (government ≠ household)

✅ How gilt auctions & bank reserves really fund deficits

✅ Why government spending creates money (and when debt stabilizes)

✅ Why “tax the rich” matters—but banks must be in the model

✅ How austerity drains the poor’s deposits and backfires

✅ Ravel simulations: debt ratio & interest payments can plateau

KEY INSIGHTS:

• Primary buyers of new government bonds are banks/CB-account holders, not “the rich.”

• Deficits add net financial assets to the private sector; austerity removes them.

• Taxing the rich helps distribution—but ignoring banking mechanics creates false “debt doom.”

• With realistic flows, debt-to-GDP and interest can stabilize rather than explode.

• Policy focus: tax the wealthy, fix banking incentives, fund real services (NHS, schools, transport).

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

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💬 Do you agree with Steve’s critique of Gary’s model? Tell us why in the comments.

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Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory. Engineers, finance professionals, and IT experts will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields.

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

(Plus get Ravel™ - my proprietary economic visualization software I used in the videos - as a free bonus, if you get accepted & join.)

#HousingBubble #TrumpHousingEmergency #RealEstate #Economics #HousingCrisis #PropertyPrices #BankingSystem

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

(Plus get Ravel™ - my proprietary economic visualization software I used in the videos - as a free bonus, if you get accepted & join.)

This video challenges the textbook story that “zero interest rates boost spending” and that banks simply lend out savings. Using side-by-side simulations built in my Ravel software, I compare the loanable-funds model taught in most economics degrees with a monetary, double-entry view of how banks actually create money. You’ll see why the first model produces a debt/GDP crisis even with small deficits—while the real-world accounting model delivers rising GDP, stable interest burdens, and deposits that grow with government deficits. We also reference the Bank of England’s 2014 bulletin on money creation and explain why popular “America will go bankrupt” takes rest on a faulty framework.

If you’ve ever been told government deficits “crowd out” investment, this breakdown shows what the textbooks miss: where money and debt originate, how central bank and treasury accounts interact, and why deficits add net financial assets to the private sector. Watch to the end for a clear, step-by-step walkthrough, then tell us which model matches reality in your view. If you value grounded, model-driven macro (without the myths), hit subscribe and share this with someone who still believes in loanable funds.

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Who is Dr. Steve Keen?

Dr. Steve Keen is an influential economist who has dedicated over 50 years to challenging mainstream economic theories. Since his days as a university student, he has been engaged in a David vs. Goliath battle against conventional economic models. Holding a Ph.D. in economics, Dr. Keen is well-known for his critical analysis and advocacy for more realistic economic approaches. His work emphasizes the importance of accounting for financial instability and incorporates elements of complex systems theory. Engineers, finance professionals, and IT experts will appreciate his methodical breakdown of economic phenomena and his development of the Minsky software, which models financial crises. Dr. Keen's contributions are crucial for anyone seeking a deeper understanding of how economic systems can impact technological and financial environments. His teachings offer valuable insights into the economic forces shaping our world. By following his analysis, professionals can gain a better grasp of economic dynamics that influence their fields.

---

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

(Plus get Ravel™ - my proprietary economic visualization software I used in the videos - as a free bonus, if you get accepted & join.)