Does the phrase 'structural liquidity' ring any bells? Its a phrase usually defined by the Norwegian Central Bankers as the amount of reserves in the banking system prior to open market operations. The main reason for the fluctuations in this so-called structural liquidity are transactions involving the governments account at the Central Bank. I. e taxes, spending and borrowing by the government.
Hi Steve, In regards to the house-price driver theory, have you published the paper on that yet? I'd like to see your results running Granger-causality. Regards, Emil
26:06 prof. Keen's prediction (a credit crunch) was wrong: since this video was published, Norwegian stock market rose by 16.8% [while Nasdaq 100 rose by 20.3%] - this is not how a credit crunch looks like
Professor, bank fees are not a fiction. They reduce the bank's liabilities and increase its equity. They have no effect on the assets side of the bank, but change the entries on a liabilities side (since equity appears on the liabilities side). It is, in the accounting sense, the same as when payments are made between two of the bank's customers.
I know, but it is a fiction that they are the only source of bank income, which is what I was focusing on. You're right that they've got the same effect as payments between two bank customers, in which case they don't expand bank liabilities and assets. Creating net new loans does expand assets & liabilities, which is the reality that Krugman and Neoclassicals in general continue to ignore via the fiction of Loanable Funds,
Thank you Professor, for the clarification. That wasn't obvious to me from your talks (I have seen almost all the videos of yours on RUclips) and thought I would mention that. I also hope Minsky (the software) allows one to capture bank fees, since that would make it more realistic, although the impact, on the economy as a whole or even the bank's profits, would be minimal.
Yes, household debt as a percentage of gdp is falling throughout most of the 1990s while house prices are rising. This isn't neccesarily a problem, but it is a problem that house prices don't seen to rise faster when the household debt as a percentage of gdp is increasing.
Great lecture as always.
Does the phrase 'structural liquidity' ring any bells? Its a phrase usually defined by the Norwegian Central Bankers as the amount of reserves in the banking system prior to open market operations. The main reason for the fluctuations in this so-called structural liquidity are transactions involving the governments account at the Central Bank. I. e taxes, spending and borrowing by the government.
Hi Steve,
In regards to the house-price driver theory, have you published the paper on that yet? I'd like to see your results running Granger-causality.
Regards,
Emil
26:06 prof. Keen's prediction (a credit crunch) was wrong: since this video was published,
Norwegian stock market rose by 16.8% [while Nasdaq 100 rose by 20.3%] - this is not how a credit crunch looks like
Professor, bank fees are not a fiction. They reduce the bank's liabilities and increase its equity. They have no effect on the assets side of the bank, but change the entries on a liabilities side (since equity appears on the liabilities side). It is, in the accounting sense, the same as when payments are made between two of the bank's customers.
I know, but it is a fiction that they are the only source of bank income, which is what I was focusing on. You're right that they've got the same effect as payments between two bank customers, in which case they don't expand bank liabilities and assets. Creating net new loans does expand assets & liabilities, which is the reality that Krugman and Neoclassicals in general continue to ignore via the fiction of Loanable Funds,
Thank you Professor, for the clarification. That wasn't obvious to me from your talks (I have seen almost all the videos of yours on RUclips) and thought I would mention that. I also hope Minsky (the software) allows one to capture bank fees, since that would make it more realistic, although the impact, on the economy as a whole or even the bank's profits, would be minimal.
30:45 isn't there a problem there? Debt is falling while house prices are rising for the first many years of the data.
Debt is falling ?
Yes, household debt as a percentage of gdp is falling throughout most of the 1990s while house prices are rising. This isn't neccesarily a problem, but it is a problem that house prices don't seen to rise faster when the household debt as a percentage of gdp is increasing.
data.oecd.org/hha/household-debt.htm
Yes, the problem is that house prices are rising in that period where private debt is stable.
Isn't there outside hot money buying property in AUS? It is not surprising then.
Current debt to GDP is at 260%
I can buy a better microphone at a gas station for 10 dollars.