IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/42912.html
   My bibliography  Save this paper

General formal foundations of the virtuous deficit–profit symmetry and the vicious debt deflation

Author

Listed:
  • Kakarot-Handtke, Egmont

Abstract

A comprehensive dynamic model of the monetary economy that produces the key characteristics of a debt deflation has been presented recently by Steve Keen as an alternative to conventional approaches. His model is based on a double-entry bookkeeping methodology but lacks an acceptable profit theory. In this respect it is not different from familiar approaches. Clearly, a deficient profit theory prevents a proper understanding of how the real world economy works. The present paper takes an entirely different route and places the core of Fisher’s debt deflation theory into the context of the consistent structural axiomatic approach.

Suggested Citation

  • Kakarot-Handtke, Egmont, 2012. "General formal foundations of the virtuous deficit–profit symmetry and the vicious debt deflation," MPRA Paper 42912, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:42912
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/42912/1/MPRA_paper_42912.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Kakarot-Handtke, Egmont, 2011. "When Ricardo saw profit, he called it rent: on the vice of parochial realism," MPRA Paper 33625, University Library of Munich, Germany.
    2. Kakarot-Handtke, Egmont, 2011. "Reconstructing the Quantity Theory (I)," MPRA Paper 32421, University Library of Munich, Germany.
    3. Tomasson, Gunnar & Bezemer, Dirk J, 2010. "What is the Source of Profit and Interest? A Classical Conundrum Reconsidered," MPRA Paper 20320, University Library of Munich, Germany.
    4. Bezemer, D.J., 2009. "No one saw this coming. Understanding financial crisis through accounting models," Research Report 09002, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    5. Kirman, Alan, 1989. "The Intrinsic Limits of Modern Economic Theory: The Emperor Has No Clothes," Economic Journal, Royal Economic Society, vol. 99(395), pages 126-139, Supplemen.
    6. Kakarot-Handtke, Egmont, 2012. "The rhetoric of failure: a hyper-dialog about method in economics and how to get things going," MPRA Paper 43276, University Library of Munich, Germany.
    7. Kakarot-Handtke, Egmont, 2011. "The pure logic of value, profit, interest," MPRA Paper 30853, University Library of Munich, Germany.
    8. Kakarot-Handtke, Egmont, 2011. "Keynes’s missing axioms," MPRA Paper 32742, University Library of Munich, Germany, revised 11 Aug 2011.
    9. Bezemer, Dirk J, 2009. "“No One Saw This Coming”: Understanding Financial Crisis Through Accounting Models," MPRA Paper 15892, University Library of Munich, Germany.
    10. repec:dgr:rugsom:09002 is not listed on IDEAS
    11. Frank Ackerman, 2001. "Still dead after all these years: interpreting the failure of general equilibrium theory," Journal of Economic Methodology, Taylor & Francis Journals, vol. 9(2), pages 119-139.
    12. Kakarot-Handtke, Egmont, 2011. "Primary and secondary markets," MPRA Paper 32996, University Library of Munich, Germany.
    13. Kakarot-Handtke, Egmont, 2012. "The common error of common sense: an essential rectification of the accounting approach," MPRA Paper 43196, University Library of Munich, Germany.
    14. Egmont Kakarot-Handtke, 2013. "The Emergence of Profit and Interest in the Monetary Circuit," World Economic Review, World Economics Association, vol. 2013(2), pages 106-106, February.
    15. Weintraub, E. Roy, 1985. "Appraising General Equilibrium Analysis," Economics and Philosophy, Cambridge University Press, vol. 1(1), pages 23-37, April.
    16. Kakarot-Handtke, Egmont, 2012. "Make a bubble, take a free lunch, break a bank," MPRA Paper 42996, University Library of Munich, Germany.
    17. Michael Hudson & Dirk Bezemer, 2012. "Incorporating the Rentier Sectors into a Financial Model," World Economic Review, World Economics Association, vol. 2012(1), pages 1-1, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kakarot-Handtke, Egmont, 2013. "Toolism! A Critique of Econophysics," MPRA Paper 46630, University Library of Munich, Germany.
    2. Kakarot-Handtke, Egmont, 2012. "Make a bubble, take a free lunch, break a bank," MPRA Paper 42996, University Library of Munich, Germany.
    3. Kakarot-Handtke, Egmont, 2012. "Intertwined real and monetary stochastic business cycles," MPRA Paper 42793, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kakarot-Handtke, Egmont, 2012. "Make a bubble, take a free lunch, break a bank," MPRA Paper 42996, University Library of Munich, Germany.
    2. Egmont Kakarot-Handtke, 2013. "The Emergence of Profit and Interest in the Monetary Circuit," World Economic Review, World Economics Association, vol. 2013(2), pages 106-106, February.
    3. Kakarot-Handtke, Egmont, 2012. "The common error of common sense: an essential rectification of the accounting approach," MPRA Paper 43196, University Library of Munich, Germany.
    4. Kakarot-Handtke, Egmont, 2011. "Trade, productivity, income, and profit: the comparative advantage of structural axiomatic analysis," MPRA Paper 43872, University Library of Munich, Germany, revised 18 Jan 2012.
    5. Kakarot-Handtke, Egmont, 2012. "The rhetoric of failure: a hyper-dialog about method in economics and how to get things going," MPRA Paper 43276, University Library of Munich, Germany.
    6. Kakarot-Handtke, Egmont, 2012. "Why Post Keynesianism is not yet a science," MPRA Paper 43171, University Library of Munich, Germany.
    7. Kakarot-Handtke, Egmont, 2011. "Primary and secondary markets," MPRA Paper 32996, University Library of Munich, Germany.
    8. Kakarot-Handtke, Egmont, 2011. "Squaring the investment cycle," MPRA Paper 32895, University Library of Munich, Germany.
    9. Kakarot-Handtke, Egmont, 2011. "Increasing returns and stability," MPRA Paper 33133, University Library of Munich, Germany.
    10. Kakarot-Handtke, Egmont, 2012. "Taxes, profits, and employment: a structural axiomatic analysis," MPRA Paper 43581, University Library of Munich, Germany.
    11. Kakarot-Handtke, Egmont, 2012. "Geometrical exposition of structural axiomatic economics (I): Fundamentals," MPRA Paper 43269, University Library of Munich, Germany.
    12. Kakarot-Handtke, Egmont, 2012. "Income distribution, profit, and real shares," MPRA Paper 43291, University Library of Munich, Germany.
    13. Kakarot-Handtke, Egmont, 2011. "Schumpeter and the essence of profit," MPRA Paper 31176, University Library of Munich, Germany.
    14. Kakarot-Handtke, Egmont, 2013. "Understanding Profit and the Markets: The Canonical Model," MPRA Paper 48691, University Library of Munich, Germany.
    15. Kakarot-Handtke, Egmont, 2014. "Mr. Keynes, Prof. Krugman, IS-LM, and the End of Economics as We Know It," MPRA Paper 53608, University Library of Munich, Germany.
    16. Kakarot-Handtke, Egmont, 2013. "The Calculating Auctioneer, Enlightened Wage Setters, and the Fingers of the Invisible Hand," MPRA Paper 44977, University Library of Munich, Germany.
    17. Kakarot-Handtke, Egmont, 2011. "Reconstructing the Quantity Theory (II)," MPRA Paper 32542, University Library of Munich, Germany.
    18. Kakarot-Handtke, Egmont, 2011. "Qualitative and temporal aggregation," MPRA Paper 33345, University Library of Munich, Germany.
    19. Kakarot-Handtke, Egmont, 2011. "The wine maker’s business and the logical origin of interest," MPRA Paper 33916, University Library of Munich, Germany.
    20. Kakarot-Handtke, Egmont, 2013. "Redemption and Depression," MPRA Paper 50924, University Library of Munich, Germany.

    More about this item

    Keywords

    new framework of concepts; structure-centric; axiom set; income; profit; distributed profit; quantity of money; credit expansion; maximum debt/income ratio; annuity; positive feedback; built-in instability;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:42912. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.