Working paper at SSRN
Abstract A comprehensive dynamic model of the monetary economy that produces the key characteristics of 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.