Steve Keen, associate professor of economics at the University of Western Sydney, is becoming something of a superstar. He has been acknowledged as one of a handful of economists to have predicted the global financial crisis and now is a regular speaker at high-profile conventions around the world.
He is a consultant for the United Nations’ Economic and Social Commission for the Asia Pacific and in April he is speaking alongside George Soros and Nobel Prize-winning economists Joseph Stiglitz and Paul Krugman at the Institute for New Economic Thinking where he has been asked to give a speech on “taming financial market instability”.
The same organisation has given Keen almost $250,000 to develop software capable of predicting an economic crisis before it happens.
Last November he was interviewed on the BBC’s Hardtalk program, which attracts a worldwide audience of almost 300 million, in which he “went public” about his idea for a “debt jubilee”, where private debts are written off “en masse” to avoid “two decades” of economic stagnation.
Yet in his home country, this renegade economist is regarded as something of a quack. His outspoken views about Australia’s housing market, which he maintains will fall by 40 per cent over the next 10-15 years, have caused many to dismiss him as an attention-seeking alarmist.
Ironically, it’s a label that Keen does not mind wearing. “Somebody has to tell people the bad news,” he says. “When I saw the signs of the financial crisis back in 2005, I didn’t want to see what I was seeing.
“It was an accident, stumbling across the data while preparing to appear as an expert witness in a court case. It showed an exponential rise in private debt in Australia, and in the US, that was clearly unsustainable and was going to lead to a collapse in asset prices.
Related previous post: Steve Keen: Behavioral Finance Lectures