Steve Keen famously had to take a long hike due to his failed prediction that Australian house prices would crash, but he collected a Revere Award for predicting the Global Financial Crisis.
Steve Keen (University of Western Sydney), receiving more than twice as many votes as his nearest rival, has been judged the economist who first and most cogently warned the world of the coming Global Financial Collapse. He and 2nd and 3rd place finishers Nouriel Roubini (New York University) and Dean Baker (Center for Economic and Policy Research) have won the inaugural Revere Award for Economics. It is named in honour of Paul Revere and his famous ride through the night to warn Americans of the approaching British army.
This notice is a bit late in the day, it appeared as a result of a paper in a new journal announced in the Heterodox Economics Newsletter.
In addition, the Keith Hancock and Wheelwright Memorial lectures.
Can’t wait for the Wheelwright address.
This year’s lecture will be delivered by Prof Diane Elson and here’s some background info on the lecture: Media commentators in USA and UK have pointed to a crisis structured by gender relations. One suggested that if Lehman Brothers had been Lehman Brothers and Sisters, a financial crisis would have been far less likely. Others described the ensuing fall in output and employment as a ‘mancession’. Feminists in both countries have argued that subsequent austerity policies are undermining the improvements that had been made in women’s economic and social rights. I will discuss the validity of these claims, and ask the audience what role they think gender has played in the financial crisis and its aftermath in Australia.
And much more. By the way, Steve Keen lost his bet on house prices in 2009 but he did not give up, predicting massive falls by 2013.
That’s the difficulty with theory that hasn’t been calibrated yet. Tells you what should happen, but not when or how the system will respond to the efforts to correct.
Driftforge
14 Aug 12 at 4:37 pm
You can bet they got a super duper government grant for that study heading.
Token
14 Aug 12 at 4:41 pm
I worked at the same “institute of higher education” that Mr Keen frequents a few years back & I can tell you it would be hard to find a more underwhelming person.
He has successfully predicted 843 out of the last 0 housing price collapses yet this never seems to discourage him. It’s folks like him that necessitated the invention of velcro shoelaces.
Gibbo
14 Aug 12 at 5:36 pm
What Gibbo said. Keen predicts a new crisis every week. Even a stopped clock is correct twice a day.
DavidLeyonhjelm
14 Aug 12 at 6:11 pm
Whilst Austrian and Neoclassical economics is like a telescope into the future! I am lovingly living in the Great Moderation, though that state of ‘serfdom’ in the Keynesian period was a bit of a downer.
Dave
14 Aug 12 at 6:33 pm
He’s been on about house prices for years. It is quite a specific prediction, and so far wrong on all counts. But anyone that predicts the failure of capitalism or of free markets is going to find a receptive audience in certain quarters. And by that I mean the ABC…
ar
14 Aug 12 at 6:43 pm
As long as huge numbers of people come in every year and head straight to the capital cities, prices won’t drop much. There will be ups and downs but overall demand will exceed supply. Governments could get rid of zoning and allow any land to be developed for housing, but they won’t. Too scared of the short term consequences. We need a charter city in Australia.
Stephen Williams
14 Aug 12 at 6:49 pm
Getting a prediction wrong (again and again) is probably not as bad as creating a methodology that sees human interaction as countless Robinson Crusoes coming into contact with each other, trying to map that with third rate maths, and then calling it science….. But hey there is a receptive audience for that, the sheltered workshop of Business Departments and Think Tanks…
Dave
14 Aug 12 at 6:50 pm
One of my offsiders lurks all the time on Steve Keen’s blog, or whatever it is. Quite worships the ground he once walked on, which is quite a bit.
This chap has been eagerly waiting the day of the collapse of western civilisation, and every spare cent he has is used to buy gold ingots. I am uncertain if he buries them around the backyard or ironically, stores them in a bank. He refuses to tell.
The thing with prophets of doom is that if they are wrong, nobody really minds because happy days are here again. And there is a piquant thrill in listening to them, sort of like vampire tales for teenage girls.
It is the ones that promise the coming kingdom of glory that end up crucified.
Entropy
14 Aug 12 at 7:06 pm
Monetary economists such as Keen predicted the crisis while the exchange theory neoclassicals not only failed to predict the crisis beforehand but continue to struggle to explain it even in hindsight.
sdfc
14 Aug 12 at 7:27 pm
“Even a stopped clock is correct twice a day.”
Spot on David.
Keen has been the perennial prophet of doom for 15 years. The fact that Professor Outlier happened to be accidentally right once in his life is no big deal.
I predict a Richmond premiership every year … I’ll be a wizard tipster sometime before 2030 …. maybe.
Leigh Lowe
14 Aug 12 at 8:34 pm
Got to love the attitude of people who have never come up with novel theory or tried to fit theory to reality in their life.
Time to look past the headline predictions and look at the data, models, and implications instead.
Driftforge
14 Aug 12 at 8:44 pm
I prefer : even a blind squirrel occasionally finds a nut.
brc
14 Aug 12 at 8:52 pm
Driftforge…and the underlying ontological foundations and epistemology….
Dave
14 Aug 12 at 9:00 pm
Bit of a kook IMO but I think his predicted deflation of the Australian property bubble will pan out, his mistake in that case was to put too early a date on it.
Chris M
14 Aug 12 at 9:27 pm
And he is a bit too Sraffaian and wrong about Marx on value…
Dave
14 Aug 12 at 9:31 pm
Aust property has already deflated substantially due to inflation over several years while prices were fairly flat. That provides a considerable cushion against further shocks.
Poor Old Rafe
14 Aug 12 at 10:12 pm
Rafe – still scope for another 3-4 years continuing decline at the current 5-10% per year, which is the experience elsewhere once the top is in.
The shock is not so much a sudden change, but the sudden realisation that the rate of change is not as temporary as expected.
Driftforge
14 Aug 12 at 11:14 pm
Housing needs to deflate. Interest payments are built into everything these days since the private equity boom has stripped the equity out of everything and loaded the entities up with as much debt as the income stream can afford.
This inflates the price of everything.
I agree with Steve Keen that it end badly when things turn down.
I just came back from a business trip in the US and the cost of just about everything was a bit over half of what it is here.
I can only imagine the shock that tourists get when they come here to one of the most expensive places in the world.
Ripper
14 Aug 12 at 11:30 pm
Steve is great fun, but I’m sad they called it the Revere award as Paul Revere built stuff. He built the second gunpowder mill in the not-yet-USA, breaking Oswald Eve’s monopoly at a time when Washington needed every grain of powder he could get. He built the Revere Copper Company which is still in business today 211 years later.
Bruce
15 Aug 12 at 8:01 am
The beauty of collecting theories, even (especially?)at the fringe, is that almost always they exist because the accepted theory fails to explain something adequately.
Steve Keen has a few good ‘why things don’t work as theoretically expected’ items figured out. Why collusion and competition will be mistaken for each other in an established commodity market. Why private debt levels matter. The significance of change in debt, and acceleration in debt.
Driftforge
15 Aug 12 at 10:38 am