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

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.

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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