Hello world!

Welcome to WordPress. This is your first post. Edit or delete it, then start writing!

The Baseline Scenario 1970-01-01 00:00:00

[unable to retrieve full-text content]

German external investment model a failure

I read an interesting research report recently – Exportweltmeister: The Low Returns on Germany’s Capital Exports – published by the London-based Centre of Economic Policy Research (CEPR) in July 2019. It tells us a lot about the dysfunctional nature of the Economic and Monetary Union (EMU) and Germany’s role within it, in particular. Germany has been running persistent and very large external surpluses for some years now in violation of EU...

IPA’s weekly links

Guest post by by Jeff Mosenkis of Innovations for Poverty Action Chris has been threatening it for a while but looks like he’s finally done it (click through to see the full thread and description of why his answer’s not what you might expect): Set your 2-year clock for my book: Why We Fight. Everything you need to know about why gangs, nations, and other groups go to war, and how to stop it. Just signed with editor Wendy Wolf @VikingBooks, an...

Let’s Get Inverted

Alright, nerds. It’s time to put on our thinking caps and fill up our pocket protectors. We’re gonna talk about inverted yield curves. First things first – What is an inverted yield curve?  An inverted yield curve is a description of the comparison between 10 year Treasury note yields and 2 year treasury note yields. Those are the only two instruments that matter here. If anyone else says an inverted curve is some version of some other set of...

Eco-Fascism Roundup

Below is a collection of essays written in the wake of the El Paso mass shooting and the alleged shooter's manifesto:What is Eco-Fascism, the Ideology Behind Attacks in El Paso and Christchurch?Luke Darby GQ @dukelarbyThe Eco-Fascism of the El Paso Shooter Haunts the Techno-Optimism of the LeftJesse Goldstein Society + Space @JesseGoldstnEco-Fascisms and Eco-Socialisms Max Ajl Verso Books @ajl_maxAfter the El Paso Massacre, the Choice Is Green...

Our over-reliance on monetary policy is the problem

I am going to argue here that monetary policy is both less effective than fiscal policy, and that over-reliance on it unnecessarily politicizes monetary policy by putting unelected officials in too prominent an economic role. I would argue that monetary policy should never be the primary macro policy driver in any economy. Yet, when you look around the world it is in almost every advanced economy. It is certainly that way in the eurozone,...

The Broken Contract

So the Lord God said to the serpent, “Because you have done this, cursed are you above all livestock and all wild animals! You will crawl on your belly and you will eat dust all the days of your life. And I will put enmity between you and the woman, and between your offspring and hers; he will crush your head, and you will strike his heel.” To the woman he said, “I will make your pains in childbearing very severe;...

Economists Do It With Models 1970-01-01 00:00:00

[unable to retrieve full-text content]

Bitcoin Is Failing As Money—But Bitcoin Cash Isn’t

Money has three principal functions: as a medium of exchange, as a store of value, and as a unit of account. Secondary attributes that have aided the adoption of various forms of money include interestingness (“Ooh! Look how shiny that gold is!”), uniform divisibility, portability, resistance to counterfeit, and imposeability. That last one is important, because it is what makes state-backed fiat currency the dominant form of money in the...

Cutting the financial sector down to size

That’s the provisional title I used for my latest piece in Inside Story. Peter Browne, the editor, gave it the longer and clearer title “Want to reduce the power of the finance sector? Start by looking at climate change”. The central idea is a comparison between the process of decarbonizing the world economy and that of definancialising it, by reducing the power and influence of the financial sector. Both seemed almomst impossible only a...

Marginal productivity theory — a dangerous thought virus

Marginal productivity theory — a dangerous thought virus The marginal productivity theory of income distribution was born a little over a century ago. Its principle creator, John Bates Clark, was explicit that his theory was about ideology and not science. Clark wanted show that in capitalist societies, everyone got what they produced, and hence all was fair: “It is the purpose of this work to show that the distribution of...

Charge us More

[embedded content] Trump’s claim that China is paying for the tariffs is completely false and basically serves to redirect income from his poor supporters to his wealthy supporters. Not only that, the policy will have the consequence of further isolating the United States, says Michael Hudson. unsplash-logoPang Yuhao

Zero Hedge — White House Denies It Is Considering Payroll Tax Cut To Boost Economy

That was quick.Zero HedgeWhite House Denies It Is Considering Payroll Tax Cut To Boost EconomyTyler Durden

Japan exports, RV sales, Tariff delays

Japan Exports Fall for 8th Month Exports from Japan dropped 1.6 percent from a year earlier to JPY 6.64 trillion in July 2019, the eighth straight month of decrease and compared to market expectations of 2.2 percent fall, amid weakening global demand and the US-China trade dispute. An Economic Warning Sign: RV Sales Are Slipping Elkhart, Ind., is flashing a warning sign that a recession could be just ahead. Capital of the country’s...

Bloomberg Interview: Wray on Modern Monetary Theory

Michael Stephens | July 31, 2019 Bloomberg Businessweek‘s Cristina Lindblad and Peter Coy sat down with L. Randall Wray for an in-depth interview on Modern Monetary Theory: $title = the_title('','',false); ?> if ($title == 'Contributors') { //get_levy_contributors(); } ?> Comments

Thirlwall’s law at 40

Table of contents of the next issue of the Review of Keynesian EconomicsThirlwall’s law at 40 Esteban Pérez Caldentey and Matías VernengoWhy Thirlwall’s law is not a tautology: more on the debate over the law J.S.L. McCombie Endogenous growth, capital accumulation and Thirlwall’s dynamics: the case of Latin America Ignacio Perrotini-Hernández and Juan Alberto Vázquez-MuñozThirlwall’s law and the terms of trade: a parsimonious extension of the...

Why Moscow Mitch needs MMT

By J.D. ALT Mitch McConnell is desperate to find investment funds and businesses that will create jobs for his Kentucky constituents. America, it seems, is mostly incapable of being a source for either. Such is the diminishment of our impoverished private enterprise system that only foreign companies seem interested in bringing U.S. dollars to America to build the factories that will employ us. America, for example, has not built an aluminum...

New Economics Foundation 1970-01-01 00:00:00

[unable to retrieve full-text content]

Macro Dynamics with a Job Guarantee – Part 1: Overview

The job guarantee as proposed by Modern Monetary Theorists would provide a publicly funded job with defined wage and benefits to anyone who desired one, with public spending on the program varying automatically and countercyclically in response to take-up of positions. In a downturn, workers who lost their jobs would have the option of accepting the job-guarantee offer. As the economy recovered, some workers would receive better offers...

How Far Can We Push This Thing? Some Optimistic Reflections on the Potential For Economic Experimentation

Readers are probably aware that there is quite a lot of discussion of Modern Monetary Theory (MMT) and the potential for fiscal experimentation batting around at the moment. Others have weighed in on this already, and I have little to add. It is striking, however, that most of the push-back — where there is push-back — is not focused on trying to discredit the idea that we should engage in fiscal experimentation. Indeed, the notion that we...

Reswitching, Recurrence, And The Incoherence Of The Marginal Productivity Theory Of Distribution

Blair Fix argues that economists argue in a circle in putting forth the marginal productivity theory of distribution. I know that there is no such consistent theory anyways. It occurs to me that process recurrence, as well as the reswitching of techniques, can be used to demonstrate this inconsistency. Suppose you completely know the technique being used in an economy to produce its output. And, which is even more impossible, you know all...

From Hammond on to Johnson – where next for fiscal policy?

As Mr Johnson takes over as Leader of the Conservative Hard Brexit Cult, and by virtue thereof as Prime Minister, it is timely to take a quick look at what his economic and fiscal policy options are - at least in the lead up to DD-Day (Do or Die) on 31st October. It’s equally important to take stock of Mr Hammond’s record as he quietly fades away after three years as Chancellor of the Exchequer.Johnson proposes tax cuts for corporates...

My review of Eric Weissman’s book on intentional homeless communities

I’ve just reviewed Eric Weissman’s book on intentional homeless communities. Points made in the review include the following: -Intentional communities in general are communities built around specific goals. But in the case of this book, I mean small communities of housing sometimes made from discarded, donated and recycled material, and sometimes purpose-built, to address homelessness. -Intentional communities are not the same thing as...

Unattached images

The Case for a Guaranteed Job

“Any government,” writes the economist and hedge fund manager Warren Mosler, “can achieve full employment by offering a public service job to anyone who wants one at a fixed wage.” Versions of this idea have received powerful endorsements from prominent Democratic politicians in the US, including presidential candidate Bernie Sanders and Rep. Alexandria Ocasio-Cortez, who has linked a government job guarantee to a Green New Deal. Moreover,...

Reswitching, Recurrence, And The Incoherence Of The Marginal Productivity Theory Of Distribution

Blair Fix argues that economists argue in a circle in putting forth the marginal productivity theory of distribution. I know that there is no such consistent theory anyways. It occurs to me that process recurrence, as well as the reswitching of techniques, can be used to demonstrate this inconsistency. Suppose you completely know the technique being used in an economy to produce its output. And, which is even more impossible, you know all...

Bloomberg Interview: Wray on Modern Monetary Theory

Michael Stephens | July 31, 2019 Bloomberg Businessweek‘s Cristina Lindblad and Peter Coy sat down with L. Randall Wray for an in-depth interview on Modern Monetary Theory: $title = the_title('','',false); ?> if ($title == 'Contributors') { //get_levy_contributors(); } ?> Comments

Surplus approach and economic anthropology. Un nuovo WP

Heterodox economics and economic anthropology: reflections prompted by two books Working paper N. 807 Luglio 2019 Sergio Cesaratto DEPS, USienaAbstract This paper has been long ago inspired by Jared Diamond (1997) and, in particular, by his extensive use of the concept of economic surplus as the key to the development of civilization. Unfortunately, Diamond does not even mention the origin of the concept in classical and pre-classical...

Keynes’ Life: 1931

I give an account below of Keynes life in 1931.January–May 1931 On 27 January 1931, Friedrich Hayek arrived in London at the London School of Economics (LSE). Hayek gave four evening lectures at 5 p.m. from 27 to 30 January 1931 on “Prices and Production” (Howson 2011: 196), and these lectures were later published in England as the book Prices and Production (September 1931), an exposition of the Austrian Business Cycle Theory (ABCT). Hayek...

Interview in Press TV News on the ominous signs of a coming new recession 14-8-2019

This is an interview in Press TV News (Stavros Mavroudeas & Steve Keen) on the recent turmoil in financial markets and the ominous signs of a coming new recession in the world economy. With Stev Keen we agreed that the gist of the matter are the unresolved causes of the 2008 crisis. However, we disagreed on its causes (Steve attributing it to deficient demand and private debt, me emphasising the falling profitability). We also disagreed on...

Interview in Press TV News on the ominous signs of a coming new recession 14-8-2019

This is an interview in Press TV News (Stavros Mavroudeas & Steve Keen) on the recent turmoil in financial markets and the ominous signs of a coming new recession in the world economy. With Stev Keen we agreed that the gist of the matter are the unresolved causes of the 2008 crisis. However, we disagreed on its causes (Steve attributing it to deficient demand and private debt, me emphasising the falling profitability). We also disagreed on...

Amazon, FedEx and the Post Office

Both Amazon and Fed ex have embarked on plans to deliver their own “last mile” package delivery previously contracted with the US Post Office. Here is a link to run75441 (postmaster Mark Jamison’s) piece on this process Fake News, Flawed Analysis, and Bogus Tweets from 2018 for a much more complete description. I have pulled a quote from the more recent Business Insider post on “last mile” delivery. According to the US Postal Service...

The Fallacy of the Natural Rate of Interest and Zero Lower Bound Economics: Why Negative Interest Rates May not Remedy Keynesian Unemployment

This paper provides a critique of zero lower bound (ZLB) economics which has become the new orthodoxy for explaining stagnation. ZLB economics is an extension of pre-Keynesian economics which attributes macroeconomic dysfunction to rigidities and market imperfections. The ZLB is the latest rigidity in that pre-Keynesian tradition. The paper argues negative nominal interest rates, even ...

Will money creation save us?

Before the 2007-2008 crisis the balance sheet of the European Central Bank (that is, the totality of securities owned and loans granted by the ECB) was approximately 1000 billion Euros, or barely 10% of the GDP of the Euro zone. In 2019 it had risen to 4700 billion Euros, or 40% of the GDP of the zone. Thus between 2008 and 2018, the ECB has implemented a monetary creation equivalent to over one and a half years of the French GDP, one year of...

Matias Vernengo — Forty Years Of Balance Of Payments Constrained Growth And Thirlwall’s Law

Matias Vernengo — Forty Years Of Balance Of Payments Constrained Growth And Thirlwall’s LawAccording to Matias Vernengo, Review Of Keynesian Economics (ROKE) will soon publish a special issue on Thirlwall’s Law, with a contribution by Anthony Thirlwall himself.Matias’ post has a scan of Thirlwall’s notes where he penned y = x/π.

Περί ΕΥΠ, Ρήξης, AirBnB, Ασύλου, Ιδιωτικών Πανεπιστημίων & Τοπικής Αυτοδιοίκησης – Συνέντευξη στο ONE

[embedded content]