Tag Archives: Chartalism

A national government with the authority to tax gets to nominate a money of account along with the ‘money things’ that will be accepted in fulfillment of the tax obligations it imposes. In doing so, the government creates a demand for a particular money – a ‘state money’. This motivates the formation of markets for goods and services whose prices are denominated specifically in the money of account. This is true whether the national government with the authority to tax is a monetary...

What I refer to as the Monetary Monopoly Model is the simplest possible mathematical model that captures basic concepts from Modern Monetary Theory (MMT). Despite its simplicity, it gives a good feeling of how a sovereign could pin down the value of a brand new currency (relative to existing currencies, or the value of real goods or services). However, the model makes almost no assumptions about private sector behaviour, and such assumptions would be needed to simulate an existing...

Schumpeter did not like Knapp's Chartalist theory.econoblog 101Schumpeter on Knapp in his 1954 HEA Dirk Ehnts | Lecturer at Bard College Berlin

The following is part-3 in an open series meant to introduce the basics of modern monetary theory (MMT) and to explore the potential for MMT’s radical model of macroeconomic reality to intersect with revolutionary theory and struggle. In part-1, the basic principles and monetary mechanics of MMT were presented alongside an irresponsibly brief review of money’s evolution from its prehistoric origins to the ongoing failure of orthodox economics to explain how money functions today. Part 2...

Pass it on.heteconomistA Simple Modern Money Tale – Buckwell Island Establishes a CurrencyPeter Cooper

Weekend reading. There are only three entries. Easy read.Ed Zimmer is an engineer and has only recently encountered economics. But I had now picked up an interest in macroeconomics — and started seriously reading many of the economists' blogs and papers. But the more I read, the more disillusioned I became. Having no previous introduction to economics, I initially assumed economists were scientists (and that was reinforced by the math I was seeing). But as I read their blogs and papers...

Some interesting history.MoneynessAn example of tax-driven money during the greenback eraJP Koning

One of the topics I discussed in Abolish Money (From Economics)! returned to Twitter today, and I just want to give a long form version of my arguments. The debate was with Eric Lonergan (web site) regarding where money should show up on the government's balance sheet. I discussed this topic in Chapter (Section?) 14 of Abolish Money -- "Money as Debt." I am keeping the core of my argument short, since I am actually just applying boring mainstream logic to the question. As that section of...

As I said, Italy, is now experimenting with paying for public services with tax credits. Presumably, this is happening because Italy doesn’t possess enough Euros to pay its citizens to provide all the goods and services needed to maintain and run the public sector of its social economy. And Italy can’t “create” the additional Euros it needs because that prerogative is the exclusive right of the EU Central Bank which Italy, even as a sovereign member of the EU, has no control over. But, as...

MMT Foolishness: Modern Monetary Theory (MMT) suggests that debt does not matter and governments can print at will creating a virtual utopia of constant growth. MMT, Keynesian, and Monetarism all suffer from the same fatal flaw: They promise something for nothing, in various ways. For discussion, please see Debunking MMT, Keynesianism, Monetarism: Reader asks “What theories do you believe?” Mish Reading List. Those who believe in the absurdity that a benevolent government would spend the...