Friday, 9 May 2014

Institute for Dynamic Economic Analysis (IDEA Economics)


Economics is broken. Conventional economics has missed badly in its forecasts, provided an incoherent explanation of economic events and failed to produce effective policy. There is another way. An economics that incorporates debt and money. An economics that is proven by history and practice, statistics and theoretical consistency.
Prosperity, real growth and full employment are not myths or suddenly unattainable in the "new normal." They are necessary conditions hidden behind a regime of bad policy and bad practices. An economics that acknowledges that money is created through the credit process is not forever waiting for baffled central bankers to make a difference. We would not be stuck in neutral with our foot on the accelerator, creating enormous action in financial markets, but going nowhere in the real economy, where real people and businesses are struggling.
An economics that realizes a return to normal is not guaranteed in a dynamic system like the economy, but is a hope based on faith in disproven theory and unrealistic assumptions. We would be rapidly installing the alternative. Instead TINA rules. There is No Alternative.
An economics that realizes the centrality of debt devotes its attention to resolving this problem, no matter the difficulty. Instead, orthodox economics largely -- believe it or not -- ignores debt unless it is on the public balance sheets. But it is the enormous private debt that created the crisis and continues to burden it. That debt is not shrinking, but growing. Absent a direct confrontation with this debt, there is no recovery. In the way are interests of an enormously powerful financial sector protecting huge and fragile banks.


Minsky,  We will offer interface and instruction in this revolutionary free open-source computer program for building and simulating dynamic, monetary economic models. A vital tool for a new approach to economics, optimized for accounting-based, flow-of-funds analysis.
The book: Finance and Economic Breakdown. A comprehensive, foundational book that develops an explicitly monetary, dynamic approach to the analysis of capitalism and its periodic financial crises.
Data collection and management. IDEA will work to form partnerships with organizations to gather, validate and normalize economic data, particularly that relating to credit and debt, and make it available online.
IDEA is dedicated to an economics that works for investors, business leaders, policy makers and, most importantly, everyday people who have been denied proper insight into the forces shaping their real lives. Our approach builds on a long tradition of classical, Keynesian and Post-Keynesian thought. We will develop, support and promote the economics that makes sense, partnering with others to establish a definitive and functional alternative to the orthodoxy that has failed.
In this work, the appropriate appeal is to the evidence as judge, not to political visions nor academic speculation. History and data are the test of explanations and predictions. If the explanations are valid, the predictions will be valid. If not, they need to be revised. It is the scientific method, and it needs to return to economics. IDEA intends to be a destination source for relevant data, as well as for valid assumptions.

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