Sunday , October 13 2019
Home / Bill Mitchell
The author Bill Mitchell
Bill Mitchell
Bill Mitchell is a Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the University of Newcastle, NSW, Australia. He is also a professional musician and plays guitar with the Melbourne Reggae-Dub band – Pressure Drop. The band was popular around the live music scene in Melbourne in the late 1970s and early 1980s. The band reformed in late 2010.

Bill Mitchell

The Weekend Quiz – October 12-13, 2019

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained. 1. The price at which the central bank provides reserves to the commercial banks is restricted by its target monetary policy rate.True False2. For a country facing strong terms and trade and an appreciating currency, a cut in wages and the rate of...

Read More »

Governments can always create jobs if they choose

Last week, I posted a graph in this blog post – RBA cuts rates as a futile exercise as Dr Schwarze Null demands fiscal action (October 2, 2019) that showed that over the 12 months to August 2019, 312 thousand jobs have been created (net) in Australia. The stunning result is that 301 thousand (96.5 per cent) of those net jobs have been in the public sector. The private labour market is thus stagnating. I was interested to delve further into that result to see if I could bring more detail...

Read More »

Latest instalment in Project Fear is not very scary at all despite the headlines

A short blog post today – being Wednesday. I am still catching up on things after being away for a few weeks. The British Institute of Fiscal Studies (IFS) offered its latest contribution to Project Fear this week with their claim that the fiscal response to a no-deal Brexit would “would send government debt to its highest level in more than half a century”. Sounds scary. Which, of course, was the intention. That is what Project Fear is about. Creating illusions of disaster...

Read More »

When old central bankers know what is wrong but can’t bring themselves to saying what is right

Last Friday (October 4, 2019), a group of former central bank governors and/or officials in Europe, issued a statement damming the conduct of the European Central Bank. You can read the full text at Bloomberg – Memorandum on ECB Monetary Policy by Issing, Stark, Schlesinger. The timing of the intervention is interesting given the change of boss at the ECB is imminent. As I explain in what follows, the Memorandum should be disregarded. Its central contentions are mostly correct but the...

Read More »

US labour market slower but unemployment reaches lows not seen since the late 1960s

In last week’s blog post – Leading indicators are suggesting recession (October 3, 2019) – we saw some conflicting signals about the state of the US economy. The PMI data was looking quite awful whereas another composite index was telling a different story. On Friday (October 4, 2019), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – September 2019 – which reveals a slowing labour market,...

Read More »

The Weekend Quiz – October 5-6, 2019 – answers and discussion

Here are the answers with discussion for this Weekend’s Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error. Question 1: If there is more “money”...

Read More »

The Weekend Quiz – October 5-6, 2019

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained. 1. If there is more "money" in the economy its value inevitably declines.TrueFalse2. If there was a fiscal rule imposed such that the national government had to balance its fiscal position at all times then this would also eliminate the sensitivity of...

Read More »

Leading indicators are suggesting recession

In the last two days, some major leading indicators have been released for the US and Europe, which have suggested the world is heading rather quickly for recession. It seems that the disruptions to global trade arising from the tariff war is impacting on US export orders rather significantly. The so-called ISM New Export Orders Index fell by 2.3 percentage points in September to a low of 41 per cent. The ISM reported that “The index had its lowest reading since March 2009 (39.4...

Read More »

RBA cuts rates as a futile exercise as Dr Schwarze Null demands fiscal action

I am now back in Australia after the latest cross-country run and so am falling back to routine. Which means a relatively short Wednesday blog post. Yesterday, the Reserve Bank of Australia cut their policy interest rate by 0.25 points to 0.75 per cent, a record low level. The RBA governor cited the weakness in the labour market as the reason for the cut and continued to suggest that the Government, which is pursuing its mindless austerity goal to record a fiscal surplus as the economy...

Read More »

Travelling all day today …

There will be no blog post today as I am travelling for the next 24 hours or so back from the US. It has been a very busy two weeks or so that has taken me to many cities and meetings with many different people. A lot of different agendas to absorb and think about. From West Africa to the struggles within the US, to the Eurozone and the chaos of Britain. But the commonality is a desire to understand MMT and apply it to better deal with the problems that face us and our planet. While I am...

Read More »