In this undergraduate course, Professor Steve Keen delves into the field of Behavioural Finance, examining how cognitive and behavioral psychology influences financial decision-making.
The course includes:
This course aims to provide students with a critical understanding of the factors influencing financial markets and economic behavior.
This module introduces students to economic behavior, starting with Neoclassical consumer behavior theoryâknown as Revealed Preferenceâand critiques it through an experiment by German economist Reinhard Sippel.
This module continues the examination of Sippel's results, emphasizing that most individuals do not meet the Neoclassical definition of rationality due to its computational limitations. It sets the stage for discussions on market demand curves.
In this module, students learn that even a functioning Neoclassical consumer model can lead to an arbitrary market demand curve. The Sonnenschein-Mantel-Debreu conditions illustrate the complexities of market demand.
This module critiques Neoclassical supply and demand analysis, arguing that even with a downward-sloping demand curve, traditional economic principles cannot accurately represent market behavior.
This module introduces the Capital Asset Pricing Model (CAPM) and the Efficient Markets Hypothesis (EMH), highlighting their assumptions of market stability and equilibrium, while presenting an alternative perspective on market chaos.
This module critiques Eugene Fama's support of CAPM and EMH, exploring the limitations of his data range and the implications of his later disavowal of these theories.
This module introduces the Fractal Markets Hypothesis and the Inefficient Markets Hypothesis, explaining fractals and their characteristics as frameworks for understanding real market behavior.
This module outlines the investment strategies suggested by the Fractal Markets Hypothesis, contrasting them with traditional approaches like the Efficient Markets Hypothesis and focusing on low volatility, high Book to Market stocks.
This module reflects on the state of macroeconomics following the recent economic crisis, critiquing the misconceptions held by leading economists and discussing the need for a more robust theoretical framework.
This module discusses the empirical data regarding the economy, highlighting the findings of Kydland and Prescott and emphasizing the role of credit in future economic analysis.
This module introduces the concept of endogenous money, discussing its foundational disputes and presenting Graziani's Monetary Circuit theory as a model for capitalism.
This module critiques the errors made by Circuit theorists in modeling the Monetary Circuit and introduces dynamic modeling, particularly the use of differential equations.
This module provides a detailed explanation of the Monetary Circuit Theory, addressing the challenges faced by Circuit theorists and emphasizing the need for dynamic economic modeling.
This module extends the Monetary Circuit model to include wage payments and consumption, illustrating how capitalists can borrow, produce, and profit within this framework.
This module continues the QED model of a pure credit economy, incorporating production and developing a pricing equation while explaining Bill Phillips' contributions to dynamic modeling.
This module uses the developed model to show money's non-neutrality in a credit-based economy, analyzing the effects of money creation and government policies during credit crunches.
This module discusses the influential economists behind Minsky's Financial Instability Hypothesis, providing a foundation for understanding its implications in contemporary economic analysis.
This module explains Minsky's Financial Instability Hypothesis through a mathematical model developed on Richard Goodwin's "Growth Cycle," illustrating its relevance in today's economic landscape.
This module reflects on the global economic crisis, analyzing the shortcomings of neoclassical economists in predicting it and comparing it with the Great Depression.
This module discusses John von Neumann's Expected Utility theory and its implications for developing the Capital Asset Pricing Model, critiquing the assumptions and confusion in asset market behavior.
This module further examines the challenges faced by CAPM, including the short time frame of statistical evidence and its critiques from Behavioral Finance, highlighting the importance of objective probability.