Professor Steve Keen: How Private Debt & Credit Cause Financial Crises

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Professor Steve Keen explains why debt and credit matter, and use them to show why the 2007 crisis occurred. He shows why several of the countries that avoided a crisis in 2007 are on the verge of one today.

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It should be obvious: financial crises are caused by the financial sector, and its primary product is debt, which is necessarily created when credit-money is created. And borrowers only commit to additional debt because they wish to spend, so there is an intimate link between private debt, credit, and demand.

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