Building on the previous video How To Make Money ( • How to Make Money ), this video adds modelling the rate of growth of GDP, as a prelude to the next video on government bonds.
Hi Steve, I can't help but wonder about Real vs. Nominal GDP. You clearly show that an increase in the money supply (either Fiat or Credit) directly increases nominal GDP. (More money = More GDP - Duh...) But I can't seem to work out how inflation comes into play. Mainstream economists from my experience at school say that the government printing more money (for example a government subsidy) would temporarily increase aggregate demand (and thus GDP) but only temporarily, eventually workers/firms adjust and inflation (average cost of goods) catches up. I hope this is not a stupid question, I'm not much of an economic scholar but trying my best. Huge fan of your work and trying my best to understand and get to the truth of the way the economy works.
what is your take on behavioral economics? It´s a good departure from the racional assumptions of neoclassical economics or doesn´t solve the underlying problems with mainstream economics?
It's a useful diversion for Neoclassicals. It often takes their definition of rationality as the point of reference, when what they call rational is really prophetic; and there are so many "deviations from rationality" that I can hear Neoclassicals saying in reaction "we'll just stick with the simpler assumption of rationality"
@@ProfSteveKeen i saw jean-philipe bouchard citing a couple of behavioral biases to explain the need of complex systems modelling in a recent post about lucas critique and got intrigued. I myself see the prospect theory being validated everytime i talk with my mom about her investments hahahaaha. Maybe there´s a bridge somewhere in there.
