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. Here's something you're unlikely to hear when you turn on the TV. Deficits are not the problem in our economy. The pundits are too busy talking about dreaded “fiscal cliff. " Of course, both the president and Congress could easily extend these cuts. When it comes to federal budget deficits there appear to be only two respectable positions, which are both, unfortunately, wrong. 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. 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. 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 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 Center of the Universe. Great Leap Forward. New Economic Perspectives. MMT: A Doubly Retrospective Analysis. Billy blog. 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. 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. (I've adjusted the paragraphing with more white space for easier reading.) JKH said... I made that comment very quickly so it was a bit sloppy. First, I’m thinking of QE in the broadest sense – being an expansion of reserves on the right hand side of the balance sheet and an expansion of assets on the left. Thinking about risk in the broadest terms, you have such categories as credit risk, liquidity risk, interest rate risk, and foreign exchange risk. In the case of their treasury purchases, there is certainly an element of interest rate risk. Cont’d...January 5, 2012 8:42 AM ￼ 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.