Broad Oak: your emotional support animal

Monday, June 14, 2010

Credit crunch, bailouts and unemployment - according to Steve Keen

Steve Keen, Australian post-Keynesian economist and one of only about 16 (previously estimated at 12) out of 20,000 econ pros to have predicted the "credit crunch" (aka GFC - Global Financial Crisis), looks at economic models and produces his own. The one I find most striking is the last, Fig. 22:

There are several implications I see here:

1. It is better to bail out borrowers than banks
2. The disruption takes c. 15 years to settle
3. Whatever is done or not done, we are left with permanently elevated levels of unemployment

DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.

2 comments:

The Arthurian said...

There are several implications I see here:

1. It is better to bail out borrowers than banks
1. It is better to bail out borrowers than banks
1. It is better to bail out borrowers than banks

That's the list.

Sackerson said...

Your emphasis duly noted, Arthurian!