Tag Archives: MMT

A job guarantee would be a standing offer of a publicly funded job. Spending on the program would adjust automatically and countercyclically in response to take-up of positions. The likely feedback between spending on the program and activity in general is interesting and can be considered within the income-expenditure framework. In what follows, the standard model is modified to find the steady state levels and compositions of income and employment and other key variables. Attention then...

The unconventional plan would eliminate unemployment in Australia, says US economist Stephanie Kelton…. Stephanie Kelton will be one of three keynote speakers at Future to Fight For: Rethinking Our Economy in Sydney (17 November), Melbourne (20 November) and Brisbane (21 November). SBS News A radical plan to give every Australian a job who wants one is gaining momentum Rosemary Bolger

Summary The US budget deficit is $100 billion in October 2018; this is a net expansion of income and savings in the private sector and explains the rebound in markets. The good news is that dollars are being added to the economy by the Federal government, allowing the private sector to post a $100 billion surplus. Private credit growth has rebounded this month and made a $17B contribution to aggregate demand and fiscal flows. Republican president and Republican Congress. Bring on the...

In my last post, I said that the fact that a government can buy anything that is for sale in its own currency is not sufficient to confer monetary sovereignty. A country which is dependent on essential imports, such as foodstuffs and oil, for which it must pay in dollars is not monetarily sovereign. Some people disputed this on the grounds that such a country could earn the dollars it needs through exports. So I thought I would write a post discussing how realistic this is in...

MMT. Edward Hadas makes a couple of mistakes:  Steven Keen is not an MMT economist although he is an MMT ally and QE is not the same as fiscal injection in that the former creates no new aggregate net financial assets in non-government while fiscal injection does. But these are subtle points and the rest of the piece is favorable, so no quibbles.  Reuters is a news service, and I initially picked this up at NADAQ. So MMT is getting wide exposure.Reuters Breaking ViewsHadas: Fear of...

Clint Ballinger uses an automotive analogy to show how MMT is not so much a matter of changing policy as much as it is of using the full power of currency sovereign. Then the self-induced limitations on using the full capacity of fiscal space disappear automatically. The mistake is largely due to the erroneous government as firm or household analogy. A sovereign currency issuer is not limited in the amount of currency it can issue, unlike currency users that must obtain the currency. The...

Invited Presentation by L. Randall Wray at the UBS European Conference, London, Tuesday 13 November 2018 Q: These questions about deficits are usually cast as problems to be solved. You come from a different way of framing the issue, often referred to as MMT, which—at the risk of oversimplifying—says that we worry far too much about debt issuance. Can you help us understand where fears may be misplaced? Wray: First let me say that I think the twin deficits argument is based on flawed...

(These remarks will be delivered today at the UBS European Conference in London.) Multiplier EffectA Better Way to Think about the “Twin Deficits”L. Randall Wray | November 13, 2018

L. Randall Wray | November 13, 2018 (These remarks will be delivered today at the UBS European Conference in London.) Q: These questions about deficits are usually cast as problems to be solved. You come from a different way of framing the issue, often referred to as MMT, which—at the risk of oversimplifying—says that we worry far too much about debt issuance. Can you help us understand where fears may be misplaced? Wray:...

The old "should the government issue bonds" debate has come up again. I would point the reader to this article at Mike Norman Economics, as well as the Richard Murphy article it refers to. I would argue that there is limited room for debate. The Treasury of the central government certainly can stop issuing bonds, conditioned on there being changes to the legal/regulatory framework for the central bank. The more important question is whether such a policy is a good idea. My argument is that...