Tag Archives: Economics

Paul Davidson and yours truly on Keynesian and Knightian​ uncertainty A couple of years ago yours truly had an interesting discussion — on the Real-World Economics Review Blog — with Paul Davidson on ergodicity and the differences between Knight and Keynes re uncertainty. It all started with me commenting on Davidson’s article Is economics a science? Should economics be rigorous? : LPS: Davidson’s article is a nice piece – but ergodicity is a difficult...

Unemployment and real wages Not exactly the story that Mankiw et consortes tell you. But Heiner Flassbeck did.

Noah Smith’s new MMT critique — more nonsense on stilts In recent years … macroeconomists have redoubled their efforts to match theory to data … This kind of research is not dramatic, headline-grabbing stuff. It doesn’t give instant answers to the big questions of macroeconomics … What it is, is science … Empirical macro represents a real, honest, ongoing attempt by dedicated researchers to explore the ins and outs of a hideously complex and hard-to-measure...

Debating MMT with Randall Wray  [embedded content]

Vickrey on deficits and obfuscatory financial rectitude We are not going to get out of the economic doldrums as long as we continue to be obsessed with the unreasoned ideological goal of reducing the so-called deficit. The ‘deficit’ is not an economic sin but an economic necessity […] The administration is trying to bring the Titanic into harbor with a canoe paddle, while Congress is arguing over whether to use an oar or a paddle, and the Perot’s and budget...

Mainstream​ economics — the true picture Mainstream economists’ picture of economics looks like this: In reality, I would argue, it looks more like this:

Schumpeter — an early champion of MMT Evidently this phenomenon is peculiar to money and has no analogue in the world of commodities. No claim to sheep increases the number of sheep. But a deposit, though legally only a claim to legal-tender money, serves within very wide limits the same purposes that this money itself would serve. Banks do not, of course, ‘create’ legal- tender money and still less do they ‘create’ machines. They do, however, something—it...

Is public debt — really — a burden on future generations? The real issue … is not whether it is possible to shift a burden (either in the present or in the future) from some people to other people, but whether it is possible by internal borrowing to shift a real burden from the present generation, in the sense of the present economy as a whole, onto a future generation, in the sense of the future economy as a whole … The latter is impossible because a...

Time to rewrite textbooks on money creation This article has discussed how money is created in the modern economy. Most of the money in circulation is created, not by the printing presses of the Bank of England, but by the commercial banks themselves: banks create money whenever they lend to someone in the economy or buy an asset from consumers. And in contrast to descriptions found in some textbooks, the Bank of England does not directly control the...

Tax avoidance — the elephant in the room  [embedded content]