Tag Archives: MMT

In a Jacobin article earlier this year, Thomas Fazi and Bill Mitchell argued in favour of a hard Brexit. We published a reply, also in Jacobin. Fazi and Mitchell (FM) responded with accusations of strawman arguments, false claims, bias and muddled thinking. We intended to write a reply at the time, but other commitments got in the way. However we believe that FM’s reply was sufficiently inaccurate – and in places, dishonest – that a reply is required, even if belatedly.... Critical Macro...

It is Wednesday and I am reverting to my plan to keep my blog posts short on this day to give me more time for other things. Today, I will briefly outline what happened last Thursday when I met with Shadow British Chancellor John McDonnell in London. As I noted yesterday, I was not going to comment publicly on this meeting. I have a lot of meetings and interactions with people in ‘high’ office which remain private due to the topics discussed etc. But given that John McDonnell told an...

Mainstream neoclassical economics is hooked on the idea of individual worker-savers as prime movers in capitalist market economies. As workers, individuals choose how much to work, determining the economy’s output; as savers, they determine how much of that output takes the shape of the economy’s capital investment. With banks as conduits channeling saving flows into investment, firms churn inputs into outputs that match worker-savers’ tastes. In this way, the neoclassical world gets shaped...

Mainstream neoclassical economics is hooked on the idea of individual worker-savers as prime movers in capitalist market economies. As workers, individuals choose how much to work, determining the economy’s output; as savers, they determine how much of that output takes the shape of the economy’s capital investment. With banks as conduits channeling saving flows into investment, firms churn inputs into outputs that match worker-savers’ tastes. In this way, the neoclassical world gets...

I am back in Australia now and I don’t have to stand on my head to write (a reference to the hassles of trying to maintain some order while travelling to different destinations on an almost daily basis). Last week, the IMF released its so-called – Fiscal Monitor October 2018 – and the mainstream financial press had a ‘picnic’ claiming all sorts of disaster scenarios would follow from the sort of financial situations revealed in the publication. At the time of the publication I was in London...

The way to fund £20bn of extra healthcare spending is for the government to create the necessary funding for that purpose. And it can do this at any moment. The fact is that tax does not precede spend. It is always, and inevitably, true that spend precedes tax. In that case the hypothesis that extra tax must be raised before the NHS can be funded is incorrect. What actually happens is that if the government spends an extra £20 billion into the economy, and increases GDP directly as a...

MODERN MONETARY THEORY (MMT) is emerging as one of the main heterodox ways to understand macroeconomics, in contradistinction to the neoliberal orthodoxy. MMT is not a set of policy prescriptions. Rather, to use co-founder Bill Mitchell’s word, it is a “lens” that allows us to see more clearly what already exists. So, its proponents claim it is not particularly ideological. The ideology comes afterwards when we craft policies based on an understanding of MMT.... This post is a good...

A new project will promote the idea that it is the government - not the private sector - that creates money. In doing so, it could demolish the arguments for austerity... Left Foot ForwardCould this alternative theory of money radically change how we think about the economy?Will Carter

If the government is not as broke as some say it is, then the inability to invest in things like public education is due to a lack of political will and not some natural law written into the fabric of economic reality. SojournersCan We Afford Economic Justice In The United States? Daniel José Camacho | Associate Web Editor

Abstract Since the global financial crisis ten years ago, a mature research programme has developed on the austerity policies imposed, especially in European states, to counter perceived threats from excessive public debt and deficits. While many scholars have criticised austerity for digging the hole deeper, fewer have provided clear alternatives. Yet, the economic school of Modern Money Theory encourages analysis into the operational realities of monetary systems to examine mechanisms,...