by Summary:
In my book “Geld und Kredit: Eine €-päische Perspektive” (3rd edition, 2020) I gave the following recommendation on p. 243 (English version available here): “This [stabilizing employment in the eurozone with fiscal measures] can be done by the ECB declaring that, in case of doubt, it will buy up all the government bonds of eurozone countries. This would make national government bonds risk-free. It must then be clarified which deficit limits are reasonable in times of upswing and recession. This would leave (or re-establish) the responsibility of national governments for full employment.” This is exactly what has happened now: deficit limits are lifted, government bonds are risk-free. This was already implied. The previous ECB President Mario Draghi said in September 2019 that the ECB
Topics:
Mike Norman considers the following as important: ECB, EZ, MMT
This could be interesting, too:
In my book “Geld und Kredit: Eine €-päische Perspektive” (3rd edition, 2020) I gave the following recommendation on p. 243 (English version available here): “This [stabilizing employment in the eurozone with fiscal measures] can be done by the ECB declaring that, in case of doubt, it will buy up all the government bonds of eurozone countries. This would make national government bonds risk-free. It must then be clarified which deficit limits are reasonable in times of upswing and recession. This would leave (or re-establish) the responsibility of national governments for full employment.” This is exactly what has happened now: deficit limits are lifted, government bonds are risk-free. This was already implied. The previous ECB President Mario Draghi said in September 2019 that the ECB
Topics:
Mike Norman considers the following as important: ECB, EZ, MMT
This could be interesting, too:
Steve Roth writes MMT and the Wealth of Nations, Revisited
Matias Vernengo writes On central bank independence, and Brazilian monetary policy
Michael Hudson writes International Trade and MMT with Keen, Hudson
Matias Vernengo writes Modern Money Theory in the Tropics: A Reply to Agustin Mario
In my book “Geld und Kredit: Eine €-päische Perspektive” (3rd edition, 2020) I gave the following recommendation on p. 243 (English version available here):“This [stabilizing employment in the eurozone with fiscal measures] can be done by the ECB declaring that, in case of doubt, it will buy up all the government bonds of eurozone countries. This would make national government bonds risk-free. It must then be clarified which deficit limits are reasonable in times of upswing and recession. This would leave (or re-establish) the responsibility of national governments for full employment.”This is exactly what has happened now: deficit limits are lifted, government bonds are risk-free. This was already implied. The previous ECB President Mario Draghi said in September 2019 that the ECB should explore new ideas such as MMT (here). His successor, Christine Lagarde, remarked half a year earlier that MMT is not a miracle cure, but could help to combat deflation (here). A key insight of the MMT is that government debt and deficits are not a problem (here), as the central bank ensures that government bonds are risk-free. The ECB is now doing the same. So all lights are on green: national governments can increase their spending at will. A financing question does not arise. Failures cannot occur, so questions of liability are also irrelevant....
Brave New Europe