So-Called Fiscal Cliff Is Baloney; Our Economy Can Recover if Obama Focuses on What We Really Need: Jobs! 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. 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: written by Stephanie Kelton, August 03, 2013 10:09 Hi Dean, Saving is just another way of saying "demand leakage". Only those with a loanable funds/Say's Law view of the world see it as anything else. Unfortunately, Krugman appears to be stuck in the latter camp.
Reconciling Modern Monetary Theory with the Wisdom of Mark Thoma. 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. " This description is not exactly right. Do exports LOWER a nation’s living standards? 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. HARRY SHEARER: This is Le Show, and we are frightfully close to Election Day, and I think some of us are heaving a sigh of relief, if not utter, utter, utter joy, that this will soon be over one way or the other. Fiscal Cliffhangers. 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. Mathew Forstater is Full Professor of Economics, University of Missouri—Kansas City, and Founding Director, Center for Full Employment and Price Stability.
He is also a Research Associate at the Levy Economics Institute of Bard College. Forstater received his B.A., summa cum laude, in African American Studies, from Temple University in 1987, and an M.A. (honors, 1993) and Ph.D. (1996) in Economics from the New School for Social Research. Best Free Podcasts. Social Democracy for the 21st Century: A Post Keynesian Perspective.
Endogenous money and fully reserved banking. In-depth analysis on Credit Writedowns Pro.
You are here: Financial Institutions » Endogenous money and fully reserved banking. 3spoken: The fixed exchange rate system at the heart of MMT. 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.
MMT Basics: You Cannot Consider the Deficit in Isolation. PRAGMATIC CAPITALISM. MMT in a nutshell. MMT Weekly #fb. MMT on Twitter. John T. Harvey - Pragmatic Economics. Winterspeak.com. 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. It can set its overnight interest rate target wherever it wants—at zero if desired—and hold it there forever, if it wants.
That lowers short term treasury rates, and Uncle Sam can—if he wants—issue only short term treasuries. The Center of the Universe. Great Leap Forward. New Economic Perspectives. MMT: A Doubly Retrospective Analysis. Billy blog. Options for Europe – Part 64. Modern Money Mechanics. Heteconomist.com. Lowerleftlimit. Money and Public Purpose at Daily Kos. Mike Norman Economics. John Thomas Financial Successfully Incorporates Modern Monetary Theory (MMT) Into Forecasts. JKH on MMT and Risk. The Traders Crucible. Main Page - MMTWiki.
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.