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Help kickstart Minsky

from Steve Keen

As regular readers would know, I have been developing a computer program for building strictly monetary dynamic macroeconomic models. New readers might have seen this article in The Economist:

Reforming macroeconomics: Claudio Borio on the financial cycle

where my work received the following mention:

Steve Keen, an Australian economist, has long argued that macro needs to incorporate these ideas, and has developed a prototype of a computer program, called “Minsky,” that can be used to model economies as monetary systems. So while most economists have not embraced Mr Borio’s agenda for the reformation of macro, some have. That is encouraging news. (Click here for Claudio Borio’s paper)

The program is called Minsky in honor of the late and great monetary economist Hyman Minsky. It is not a model of the economy as such, but a visual tool by which models can be developed.

It has been under development for roughly a year now, thanks to a US$128,000 grant from the Institute for New Economic Thinking. That has enabled me to hire one brilliant programmer, Dr. Russell Standish, for about 10-20 hours a week–the most that a contract programmer can afford to devote to a single project. Consequently, the program as it currently exists represents about 3-4 months of programming time. That’s produced a functional program, but it is still in its infancy. I want to take it to adulthood, and for that I need serious funding that will enable me to hire several top-notch programmers for several years.

That’s where you come in–if you are willing. Next Wednesday I will launch a campaign on Kickstarter to raise development funding for Minsky.  

Producing a combined model Keen and Krugman's visions of lending in Minsky

Producing a combined model Keen and Krugman’s visions of lending in Minsky

The amount I’m asking for on Kickstarter–US$50,000–is quite modest. To push the analogy, that’s enough to get the program from infant stage to toddler. But obviously I’m hoping to raise a lot more–enough to get Minsky to the end of high school, so to speak.

That would require hiring Russell full-time for at least 3 years (otherwise he’ll only be able to devote half or less of his time to Minsky), as well as two brilliant and dedicated young programmers Nathan Moses and Kevin Pereira, who have almost completed the development of a version of Minsky that can be run from a website and on tablets. That will take about US$1 million.

So if you agree that economics needs reform, if you’ve enjoyed my work to warn of the economic crisis over the last seven years, and if you’d like to help economics finally overcome its fear of money and dynamics, please make a contribution to the development of Minsky.

You can preview the campaign here:

Preview of Kickstarter Campaign

The campaign will go live on Wednesday December 19th. Please get ready to put some finance into building Minsky. To make a contribution, all you need at your end is an account at Amazon.

  1. sergio
    December 21, 2012 at 2:19 am

    No place is left to the State?

  2. December 22, 2012 at 4:26 pm

    Where does the real estate cycle fit into this scheme of things? The bubble was, in the final analysis, a classic credit-fuelled land price bubble. And the phenomenon is a consequence of a positive feedback loop in the system, in that easy credit drives up land PRICES, or the prices of assets that are ultimately created around land titles, when that credit is given on the security of the land titles themselves. The system is reflexive, feeding on itself to the point where it inevitably becomes unstable.

    One of the reasons for this is that the true value of land is its RENTAL value ie the revenue stream that the land is capable of yielding. When the PRICE of land is rising, RENTAL values hardly move, leading to declining yields as the cycle progresses. The time eventually comes when the yield is so low as to be unstable. A minor perturbation will then prick the bubble.

    A plausible and realistic model must take account of this process.

  3. RadTransf
    December 26, 2012 at 9:13 pm

    If I can propose you some advice for the kickstarter, you should change a bit the video. The sound quality is not so good, and you should not be in a tiny part of the video, but alternate (not too often) between you and want you want to show.

    Also: 50.000$ is definitely not modest, and the only project to have reach 1m$ are videogames which appeal to a lot of people.

  4. RadTransf
    December 26, 2012 at 9:22 pm

    I forgot: Your should rethink also the list of rewards, and explain more why you want to make a closed source version of the program if you reach 1m$ Usually it’s the reverse…

  5. Steve Keen
    December 26, 2012 at 9:36 pm

    Thanks RadTransf,

    I agree with both points. I’m using the delay in starting the campaign to redo the videos.

    The closed source is because as it stands, it will augment an INET grant–and that has to be Open Source. With more finance, we can afford a separate commercial thread as well.

    I now hope to start in early January–subject to other issues that may force me to devote my attention elsewhere.

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