Steve Keen
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Dr Steve Keen is an Associate Professor in economics and finance at the University of Western Sydney. He criticizes both modern neoclassical economics and (some of) marxian economics as inconsistent, unscientific and empirically unsupported. The major influences on Keen's thinking about economics include Hyman Minsky, Piero Sraffa and Joseph Alois Schumpeter. His work has been published in the academic journal Physica A.
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[edit] Debunking Economics
Keen's full-range critique of neoclassical economics is contained in his book Debunking Economics. Keen collects and popularizes a wide variety of critiques of numerous aspects of neoclassical economic theory and argues that together they show that neoclassical assumptions are badly flawed.
Keen's book closes his book with a survey of various schools of heterodox economics, concluding "None of these is at present strong enough or complete enough to declare itself a contender for the title of ‘the’ economic theory of the 21st century." However, he argues that neoclassical economics is a degenerative research program, not generating new knowledge but growing a belt of protective auxiliary hypotheses to shield its core beliefs from critique.
[edit] Critique of neoclassical theory of the firm
Keen's own work (as opposed to his popularization) has focused on refuting the neoclassical theory of the firm, which argues that firms will set marginal revenue equal to marginal cost. Keen notes that empirical research finds real firms set marginal revenue well above marginal cost. He cites Eiteman & Guthrie (1952), finding 89% of firms do so, as well as more recent work by Alan Blinder. He argues (in a paper published in Physica A[1]) that this is because economic theory neglects the effect on price of increasing or reducing supply by a single item and finds that charging a markup is actually a more stable, profitable equilibrium. Other economists argue that Keen has badly misunderstood the economic theory involved.[2]
[edit] Books
Steve Keen's books include:
- Debunking Economics: The Naked Emperor of the Social Sciences (2001, Pluto Press Australia) ISBN 1-86403-070-4
Debunking economics has the interesting feature of being written for a lay audience, but with an accompanying web site which provides more detailed mathematical expositions for experts.
- Co-editor of: Commerce, Complexity and Evolution: Topics in Economics, Finance, Marketing, and Management: Proceedings of the Twelfth International Symposium in Economic Theory and Econometrics. New York: Cambridge University Press. ISBN 0-521-62030-9.
[edit] Related topics
[edit] References
- ^ http://www.debunkingeconomics.com/Papers/Micro/KeenStandish2006_CritiqueNeoclassicalTheoryOfFirm_PhysicaA370pp81-85.pdf
- ^ http://robertvienneau.blogspot.com/2006/07/response-to-comments-on-steve-keens.html
- Eiteman & Guthrie (1952): "The shape of the average cost curve", American Economic Review 42: 832-838.
- Blinder, Alan; et al. (1998): Asking about prices: a new approach to understanding price stickiness, Russell Sage Foundation, New York.
[edit] External links
- Academic website
- Website of "Debunking Economics"
- There is madness in their method A sample chapter.
- Keen's Physica A article on the invalidity neoclassical economic theory of the firm.
- A more detailed presentation of the contents in the Physica A article.
- A news feature on an Econophysics paper co-written by Prof. Keen appeared in the journal Nature, accompanied by an editorial.
