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Abstract

One of the ingredients necessary to an understanding of the impact of cyber attacks is a reliable model of the economy. We face great challenges in trying to protect an already potentially unstable system from cyber aggression and operating with a flawed understanding of the determinants of output, employment, asset prices, et cetera, surely condemns us to failure. This is so not only because we need to know where points of leverage might exist for bad actors to disrupt and disable our system, but because policy recommendations may face significant push back from both selected scholars and powerful vested interests. Readers of this journal need to be able to distinguish between reasonable objections and smoke screens and to be keenly aware of the flimsy foundations upon which latter will be built. To that end, this article introduces an elementary Post Keynesian macroeconomic model that explains the forces that determine output and employment and–unlike conventional approaches–highlights the role of the financial sector.

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