Redemption and Depression

28 Pages Posted: 23 Oct 2013 Last revised: 23 May 2015

See all articles by Egmont Kakarot-Handtke

Egmont Kakarot-Handtke

University of Stuttgart - Institute of Economics and Law

Date Written: October 22, 2013

Abstract

According to prevailing methodological criteria, standard economics is definitively refuted. Joan Robinson’s wake-up call “Scrap the lot and start again” has therefore lost nothing of its original freshness and urgency. Yet, how can the restart succeed? This inquiry builds on structural axioms. First, conceptual consistency is assured and the confusion about profit and income is dissolved. The question of interest is then how a recession or depression develops as the result of the normal functioning of the monetary economy. This involves the identification of positive feedback. A very effective mechanism consists of the circular interaction of profit and distributed profit.

Keywords: new framework of concepts, structure-centric, axiom set, randomness, market clearing, budget balancing, consumption economy, investment economy, credit expansion

JEL Classification: B59, E32, E50

Suggested Citation

Kakarot-Handtke, Egmont, Redemption and Depression (October 22, 2013). Available at SSRN: https://ssrn.com/abstract=2343561 or http://dx.doi.org/10.2139/ssrn.2343561

Egmont Kakarot-Handtke (Contact Author)

University of Stuttgart - Institute of Economics and Law ( email )

Keplerstrasse 17
Stuttgart
Germany

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