So-Called Fiscal Cliff Is Baloney; Our Economy Can Recover if Obama Focuses on What We Really Need: Jobs! | Alternet July 15, 2012 | Like this article? Join our email list: Stay up to date with the latest headlines via email.
Savings Glut" Means Much of Economics Is WRONG This exchange (here, here, and here) between my friend Jared Bernstein and Casey Mulligan is worth a brief comment. As I've told several people who followed it, Mulligan is absolutely presenting the mainstream position in the profession, but Jared is right. The question, if we ignore silly semantics, is whether the economy typically faces a problem of insufficient demand. In other words, if companies, families, or the government went out and spent $500 billion tomorrow would this boost growth or just cause inflation. (Yes, I used all three interchangeably because if the problem is a lack of demand it doesn't matter who spends the money, the short-term effect on the economy is the same.)
Mike Norman Economics: Dean Baker — "Savings Glut" Means Much of Economics Is WRONG Dean Baker presents an account of saving and demand leakage that is in agreement with MMT. CEPR — Beat the Press"Savings Glut" Means Much of Economics Is WRONG Dean Baker Stephanie comments:
The NYT had a brief discussion of Modern Monetary Theory (MMT) today in the context of a profile of Warren Mosler, one of its major proponents. The profile includes a dismissive comment from Mark Thoma, a professor at the University of Oregon and the creator of the blog, The Economist's View: "They deny the fact that the government use of real resources can drive the real interest rate up ... I think it’s just nuts." Reconciling Modern Monetary Theory with the Wisdom of Mark Thoma
Do exports LOWER a nation’s living standards? | Mecpoc By Andrea Terzi In the U.S. and (particularly) in euro countries, policies aimed at stimulating exports are (sadly) considered an effective response to lagging growth (U.S.) and recession (Euroland). Viewing a net export balance (i.e., an international trade surplus) as an economic virtue and a growth engine is a relic of Mercantilism that has had a powerful comeback, not coincidentally, with the abandonment of fiscal policy as a counter-cyclical tool.
Transcript: Stephanie Kelton Interview - Harry Shearer Listen to the podcast here. Interview recorded Thursday, October 25, 2012. Here it is! From deep inside your radio.
This year, January 1st will not be just another day to nurse a hangover, it also marks the deadline for the United States government to enact regulations to avert a prospective economic crisis. Join Central Standard as we welcome economists Stephanie Kelton and Mat Forstater, to discuss the impact of the pending decisions congress will make regarding the fiscal cliff, and how these decisions will affect the average American. Fiscal Cliffhangers
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Endogenous money and fully reserved banking In-depth analysis on Credit Writedowns Pro. You are here: Home » Financial Institutions » Endogenous money and fully reserved banking After the Great Depression broke out, American economist Irving Fischer championed a view of the financial system now called “endogenous money“, which sees each person in the economy as a creator of credit. Viewing the economy through this lens leads to a number of conclusions that are at odds with economic orthodoxy, particularly regarding the ability to generate a credit accelerator by adding reserves to the financial system. The endogenous money view also has some interesting things to say about the role of fractional reserve banking as a credit accelerator, which is where I want to focus here.
Out of the debate over at Steve Keen's blog a key point arose that I figured would be worth breaking out: Have you ever wondered why banks denominate their accounts in the liabilities of another bank? That can only be because they are in a fixed exchange arrangement with that other bank – which they are required to maintain. MMT primarily describes the policy benefits of a particular system – one where the private banks are locked in a fixed exchange rate system for their own liabilities with the liabilities of one or more central banks under a legally enforced arrangement, but where that central bank floats their own liabilities on the currency markets. It also describes the follies that ensue when the central banks fix the exchange rate of their liabilities with each other or with a supranational central bank. To pay your taxes you need to present the government’s own bank’s liabilities to settle that debt. 3spoken: The fixed exchange rate system at the heart of MMT
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Modern Monetary Theory The problem cannot simply be a problem of current account imbalances—we’ve got them all across the US states. And the US, itself, runs a chronic current account deficit. But the US federal government is sovereign, it issues its own currency. It helps to offset current account deficits among states through fiscal transfers; and it can never run out of its own currency no matter how big its budget deficit.
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Saturday Quiz – January 11, 2014 Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days.
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Money and Public Purpose at Daily Kos Reposted from Alan Grayson by psyched From a recent 188-page report by the World Health Organization come these ghastly and appalling factoids: Suicide rates rose 40% in the first six months of 2011 alone.Murder has doubled.9,100 doctors in Greece, roughly one out of every seven, have been laid off. Joining those doctors in joblessness are 27.6% of the entire Greek labor force. By comparison, in the depths of the Great Depression, unemployment in the United States peaked at a lower percentage than that. Among Greek young adults under 25 years old, unemployment reached an abominable 64.9% in May.
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This post brings together several disparately placed comments on the same topic for convenient reference, and for those that may not have seen the comments. Initially, JKH commented on a post by Perry Mehrling at The Money View concerning the recent article at The Economist on heterodoxy that mentions MMT. I posted both here. Hugh Heden asked for clarification here. JKH responded in the following comment. JKH on MMT and Risk
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3spoken: Savings - Explaining the Humpty Dumpty word The main reason for doing the work on the Blue Book was to work out the relationship between the numbers and what they are called in 'National Accounts' terms. This can then be related back to what we talk about in MMT and hopefully reduce the amount of talking past each other that goes on. The first saving relationship comes from how income is defined: Gross National Disposable Income - Household Final Consumption - Government Final Consumption = Gross Saving. So Gross Saving is most definitely Income that is not spent on Final Consumption. The equivalent 'saving' figure for the external sector is called the Current External Balance.