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Correcting GDP for big finance; A new website venture

I was in New York yesterday at the New School for Social Research to be there for an informal presentation by Jacob Assa, a stock-flow-consistent modeling enthusiast. I seek to incorporate the principles of this approach to modeling into work that I do, including my collaborative effort with Tai Young-Taft. Assa argues that the GDP concept (of course already much maligned for many reasons) relies on a standard theory of money, banking, and finance. Incorporating the SFC principles that inform SFC modeling into the construction of GDP gets us perhaps to a much more accurate picture of the size of the economy—even as other work goes on simultaneously to make this construct more relevant as a measure of something people care about, including the environment. It was good to see stock-flow consistency and endogenous money–my dissertation topic at U. of Notre Dame–introduced to this discussion at the super-cool New School campus.

SFC economics highlights the role of finance, which has been recognized as a huge macroeconomic force since the financial crisis. An increasing part of the world economy is financial; how much of this activity adds directly to income or production? How does it do so? SFC is associated with names such as Hyman Minsky, who sought to develop a financial Keynesianism.

From time to time on this blog, I have mentioned food and veganism. In other news, last week, I started a new blog called Healthy Vegan Hudson Valley at Overweightness, heart disease, and diabetes are unnecessary scourges in my view. My intended audience will be mostly people who are vegans or vegetarians and people thinking of switching to a diet free of meat and fish. They, as plant-centric eaters, will naturally be interested, and modern medicine’s lessons in nutrition offers a good way of being a vegan or vegetarian in a healthy and relatively easy way. The big scientific picture on nutrition can be found on sites like and, which draw on research beginning with the China-Cornell study whose results emerged in the 1990s. The new blog, on the other hand, will focus on the local picture in the mid-Hudson Valley. This area features an abundance of local agriculture, vegan restaurants, CSAs, and even a real civic organization that hosts an annual vegan Thanksgiving dinner.

I should mention that Duncan Foley, seated next to me at yesterday’s economics talk, has very recently won the 2017 Guggenheim Prize in Economics. The award is given for lifetime accomplishments in the field of economics. Congratulations, Duncan!


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