Peter Cooper: Heteconomist

A key purpose of demand-led growth theory is to extend the ‘principle of effective demand’ to contexts in which productive capacity is best considered variable rather than fixed. The central idea is that, over any time frame, it is demand that determines output, and demand-led variations in income that adjust planned leakages to planned injections. Once it is acknowledged that capacity is variable, it becomes clear that the adjustment of output to demand, and planned leakages to planned...

A while back on Facebook, or maybe it was twitter, someone asked what would be left for our own lives if artificial intelligence ever came to exceed our own. Or similarly it could be asked, if the robots ever became better than us at everything, what would be the point of life? I don’t know the limits of artificial intelligence, but one answer to these questions is that we would be freer to focus on learning, exploration, self and group development, social interaction and play. If these...

Modern Monetary Theory (MMT) continues to make inroads into the mainstream discourse with the appearance of an article by Youssef El-Gingihy in The Independent Online. The article features MMT in connection with the new book by Bill Mitchell and Thomas Fazi, Reclaiming the State. At its recent rate of dissemination, MMT may transition from heterodox to mainstream ahead of expectations. Although the finer points of MMT can get quite involved, the most basic takeaway is very simple. For...

A recent post considered one way of including a job guarantee in the income-expenditure model. Doing so makes it possible to represent various macro effects of a job guarantee within the model. An obvious effect is that the program would deliver a degree of demand stabilization. An effect that is perhaps not quite so obvious is the way in which a job guarantee would ensure supply-side changes in the economy automatically impact on demand, actual output and employment. Before illustrating a...

Welcome to the very first (and possibly last) “Don’t Understand, Don’t Even Want To F___ing Understand Modern Money” post, otherwise known as a DUDE WTF UMM… post. This is for those of us who have no desire to consider economics at even an elementary level but who are tired of others exploiting our indifference and blasé attitude for their own dubious ends. Just because we don’t know diddly-squat about economics and are proud of it, this should not disadvantage us in life. What we need are...

When Marx’s theory of value is interpreted in a simultaneist way, it is relatively easy to calculate the ‘monetary expression of labor time’ (or MELT). It is simply new value added, measured in monetary terms, divided by productive employment. If it were not for the ‘productive’/’unproductive’ distinction, the simultaneist MELT could readily be calculated from the National Accounts as the ratio of Net Domestic Product at current prices to Total Employment. Retaining the...

One suggestion in the comments to the ongoing “short & simple” series is to cover the balance of payments. This will be covered at some point in the introductory series, but I am still considering how best to present it in brief, simple form. With that in mind, it seemed worth attempting a regular post on the topic. The post is still intended to be elementary in nature, but is perhaps at about the introductory university level. The post is also too long to qualify as “short”, even...

The video below is of a three-part presentation by Bill Mitchell, L. Randall Wray and Martin Watts concerning their forthcoming MMT textbook. Throughout the presentation and in the Q&A session that follows there are interesting observations on the current state of university economics and prospects for MMT and the economics discipline in general. The presentation was given at the First International Conference on Modern Monetary Theory held from September 21-24, 2017 at the University...

Under a job guarantee, there would be a standing job offer at a living wage for anyone who wanted such a position. Anyone without employment in the broader economy, or unhappy with their present employment, could opt for a position in the job-guarantee program. Similarly, individuals with less hours of employment than desired could top up their hours by working part-time in the job-guarantee program. In principle, the program might be locally or centrally administered. But, irrespective of...

What is the most appropriate entry point to the study of a monetary economy in which government is currency issuer? Is it “the market”? Is it the definition: total spending equals total income? Is it real exchange? Real production? Is it total output? Total employment? Total value? Distribution of income? The origin of profit? Price formation? Competition? I would answer “no” to all these suggestions. They are all important aspects of the subject, but they are all embedded in something...