During my little vacation recently from writing about monetary policy, it seems that there has been quite a dust-up about endogenous money in econo-blogosphere. It all started with a post by Steve Keen, an Australian economist of the post-Keynesian persuasion, in which he expounded at length the greatness of Hyman Minsky, the irrelevance of equilibrium to macroeconomic problems, the endogeneity of the money supply, and the critical importance of debt in explaining macroeconomic fluctuations. In making his argument, Keen used as a foil a paper by Krugman and Eggerston “Debt, Delevereging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach,” which he ridiculed for its excessive attachment to wrong-headed neoclassicism, as exemplified in the DSGE model in which Krugman and Eggerston conducted their analysis. I can’t help but note parenthetically that I was astounded by the following sentence in Keen’s post.
There are so many ways in which neoclassical economists misinterpret non-neoclassical…
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Utopia, you are standing in it! 
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