[AG-GOuFP] Fwd: Economic Growth and Financial Stability

[Gunnar Kaestle <gunnar.kaestle AT gmx.net>]

Moin,

hier gibt es etwas zum Runterladen.

Vortrag:
Steve Keen: Instability in Financial Markets
http://www.youtube.com/watch?v=js9WBi_ztvg

Paper:
Instability in Financial Markets: Sources and Remedies
http://ineteconomics.org/sites/inet.civicactions.net/files/keen-steve-berlin-paper.pdf

Und hier unten noch ein Modell zum Rumspielen, das von den High 
Performance Coders bereitgestellt wird.

Gruß,
Gunnar


PS. Das zitierte Paper zur Stabilitätsanalyse findet man auch hier:
http://www.math.mcmaster.ca/~grasselli/GrasselliCostaLima_MAFE_online.pdf

-------- Original-Nachricht --------

Thanks Gunnar; you might also enjoy the program I'm having developed 
with INET's support to produce a system dynamics program that is 
specifically tailored to modeling financial flows. This movie shows how 
to use it:

http://www.debtdeflation.com/blogs/wp-content/uploads/2012/08/GoodwinDesignVideo01.mov

and the Windows executable can be downloaded from here:

http://www.hpcoders.com.au/Minsky.1.0.D99-distrib.tar.gz

It's still VERY early developmental software, but the core feature is 
there--a double-entry bookkeeping interface to designing ODEs (so yes 
the banking sector is in effect an integrator). We're just over halfway 
through the INET funding and are now concentrating on adding panache to 
the graphics.

On analysing the model, I've recently had the great good fortune of 
having my model and approach discovered by Professor Matheus Grasselli 
at the Fields Institute in Toronto. He has done a formal analysis of the 
stability properties of my 1995 model (see attached paper). I'd be 
interested in doing a system dynamics analysis as well. A very good 
friend of mine, Trond Andresen, is an academic in control theory at the 
Norwegian University of Technology, so I'm well aware of those 
techniques though I have never had the time to apply them myself to my 
own model.

The attached draft paper (which will be published in an abridged form in 
the Australian journal The Economic Record next year) explains the model 
more clearly than my original 1995 paper. In concert with Matheus's 
paper, it should give you a very good handle on the system.

Matheus also works in Matlab, so I expect you two could effectively 
exchange programs here.

All the best, Steve
Steve Keen
www.debtdeflation.com/blogs
+61 (0) 404  464 523
________________________________________

Dear Prof. Keen,

Recently I learned about your work on debt driven bubble economics, and
I really like your system dynamics approach. Within control theory, it
has been quite useful not only to look into the time domain, but to
analyse the frequency domain as well.

There is a method for the decomposition of time series into a growth
trend and a cycle component by using complex numbers and the exponential
function. The real component will give the trend and the imaginary part
will result in a rotating vector (see attachment).
If it is possible to (partly) linearise the model, formal methods of
stability proofs (Hurwitz, Nyquist, Lyapunov, etc.) can be chosen.
Lagging and leading behaviour is described via phase shift, i.e. the
angle in polar representation of a complex number.

I'd like to learn more on your current research. Can you recommend a
publication with some details on the model structure? Has the bank the
function of an integrator (= 1/s in the frequency domain)?

The difference between the Great Depression of the 30s and the
Contraction of today is that it may be much harder for the physical
economy to recover now. As production elasticity for energy is extremly
high (), and as the transport sector needs an essential essence hardly
to substitute, the derivative of the logistic growth curve - currently
being at the inflection point - is fed with a peak into the production
function with a following decline.

Finally, I'd like to ask about a personal gut feeling: have you ever
noticed a relationship between the emergence of bubbles with rising
entropy? Will higher interest rates reduce entropy by making money more
expensive so that only business proposals with a strong perspective
receive funding?

Kind regards,

Gunnar Kaestle