Rational Prosperity: Economic Model and Predictions

First Principles

Money Realism is the foundation but if you want a quick overview that is mostly accurate then watch Ray Dalio's 30min video on the economy. The video is not a substitute for actually learning about Money Realism!

Another good paper written by Cullen Roche is Understanding the Modern Monetary System which you can download for free.

Behavioural Economics/Finance affects almost every decision we make. Whether it's buying property because everyone at a party is talking about their investment property (herd mentality) or a business deciding to invest another $100m because they have already invested significantly (sunk cost fallacy), these decisions at the individual/organisation level are affected by cognitive and behavioural biases

Goverment/Public sector debt

Government deficits directly improve the financial strength of the private sector. (Tymoigne 2010)
Government deficit may be a problem if there's a stringent exchange rate regime (e.g. Greece - monetary sovereignty surrendered to the Eurozone) or if debt is issued in foreign currency (e.g. Argentina) (Tymoigne 2010)

Credit booms

Financial fragility is not a measure of the size of the leverage but the quality (Tymoigne 2010)
Bell (2009) found good indicators of banking crises include rapid loan growth, slow output growth, and rising real interest rates.
Credit booms increase the likelihood of financial crises (Schularick & Taylor 2012)
Credit expansion can hamper output growth if it is channelled into asset transactions rather than productive investment (Benzemer, Grydaki and Zhang 2014)

Understanding Money in General

Australian property market likely to fall at least 10% as economy enters recession by 2016
Base case AUD and Australian interest rate predictions met (see Correct predictions below). Worst case AUD/USD 0.50 (due to financial/political crisis in Asia or macro shock)
China will crash by 2016

US does not have a debt crisis due to enormous asset side of balance sheet
Government borrowing does not reduce business borrowing (most of the time)
Engineering a weaker currency through monetary policy is not a path to sustainable economic growth
Keynesian policies such as deficit expanding tax cuts or infrastructure investments are beneficial during a recession
The reason why high inflation won't occur is because credit growth is demand driven (as MR states) and as we've seen over the years in the US, Europe and Japan, lower interest rates have not engendered credit growth
Basically more debt in the system results in less growth because interest must be paid from income (Post-Keynesian theory of financialisation of the economy), which means less disposable income
Deflation is occurring across the world but could be one or a combination of many reasons including: the accumulation of private sector debt, demographic trends, globalisation or income/wealth inequality (Post-Keynesian reason)

None yet since 2014.