The Great Australian Land Bubble - Steve Keen on Why Governments Aren’t the Problem — and What Really Ends the Land Cycle..

This week I sat down with renegade economist and author of Debunking Economics, Professor Steven Keen.

Steve’s pioneering research, modelling how rising private debt can trigger economic collapses, earned him the prestigious Revere Award from the Real-World Economics Review.

It’s an honour that’s given to economists whose work most accurately foresaw the global financial crisis in 2008 and challenged mainstream economic thinking.

The Review described Keen as the economist…

ʻwho first and most clearly anticipated and gave public warning of the Global Financial Collapse and whose work is most likely to prevent another GFC in the future.ʼ

Steve wasn’t the first economist to give advance warning of an impending downturn. Fred Harrison, deserves that recognition - but Steve was one of the most prominent to do so.

His research is significant because it stands out for demonstrating, in measurable terms, how private debt drives both the boom and the inevitable bust of the land cycle.

I’d also argue that if land were not open to speculation - encouraged by taxation policies that reward unearned gains - private debt would never have grown to such extremes in the first place.

But Steve’s focus is monetary. His models centre on credit and income flows, not on land itself. That’s where the gap lies - it misses the root of the problem.

Still, in Australia, with no effective checks on land speculation, a land cycle is inevitable. And it’s Steve’s ability to translate the mechanics of debt into quantifiable models - putting numbers to what most economists only describe in theory - that makes his work so powerful.

When the Main Stream Laughed — but Steve Was Right

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