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Tag Archives: neochartalism

Two Thomas Palley Papers On Neochartalism

Thomas Palley has two papers critiquing Neochartalism aka “modern monetary theory” or “MMT” or “M.M.T.” 🥳:Macroeconomics vs. Modern Money Theory: Some Unpleasant Keynesian ArithmeticThe last decade has witnessed a significant revival of belief in the efficacy of fiscal policy and mainstream economics is now reverting to the standard positions of mid-1970s Keynesianism. On the coattails of that revival, increased attention is being given to the doctrine of Modern Money Theory (MMT) which makes...

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Some Extreme Reactionary Views Of The Neochartalists

Recently, Doug Henwood critiqued Neochartalism aka “modern monetary theory” for many of its reactionary views.More and more of Neochartalists’ reactionary views are becoming apparent now. So according to a recent Warren Mosler presentation at the New School, he proposes the following:🤯Not just that, he thinks that the 70% tax rates proposed by Alexandria Ocasio-Cortez “(d)oes not materially alter distribution of income”, “(d)oes not alter distribution of consumption” and “(d)elays alternative...

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Gerald Epstein’s Critique Of Neochartalism

Gerald Epstein of PERI has written a fine paper The Institutional, Empirical and Policy Limits of ‘Modern Money Theory’ critiquing the shortcoming of Neochartalism.Epstein’s main critique is that Neochartalism ignores the role of international financial markets and the constraint it puts on fiscal policy. Abstract:Modern Money Theory (MMT) economists acknowledge a number of empirical and institutional limitations on the applicability of MMT to macroeconomic policy, but they have not attempted...

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Doug Henwood In Jacobin On Neochartalism

Doug Henwood In Jacobin On NeochartalismOn Facebook, Doug Henwood says that he wanted the title The Phantasmic World Of Modern Monetary Theory, A Late Imperial Fever Dream for his piece critiquing Neochartalism but Jacobin editors changed it to Modern Monetary Theory Isn’t Helping.Henwood has written an excellent critique of Neochartalism, a cut above most critiques. I liked the part about Beardsley Ruml who is quoted frequently by the Chartalists but it turns out that he is a right-wing nut,...

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Randall Wray On Current Account Deficits

Randall Wray has a new article Does America Need Global Savings To Finance Its Fiscal And Trade Deficits? at American Affairs. Wray repeats the standard Neochartalist argument that the United States does not have to worry about its trade deficits. But a look at his previous predictions would warn us on such arguments.Here’s from his chapter What A Long, Strange Trip It’s Been: Can We Muddle Through Without Fiscal Policy? in the book Post-Keynesian Principles of Economic Policy written in...

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Thomas Palley — Government Spending In The Income-Expenditure Model: Spending Composition, The Multiplier, And Job Guarantee Programs

Thomas Palley — Government Spending In The Income-Expenditure Model: Spending Composition, The Multiplier, And Job Guarantee ProgramsAbstract:This paper reconstructs the income – expenditure (IE) model to include a distinction between government purchases of output versus government production. The distinction has important consequences for output and employment multipliers. The paper also extends the IE model to incorporate a government job guarantee program (JGP), and the extended model...

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Neochartalists Shifting Positions

In a three part series, Bill Mitchell, makes the case against free trade. While this is most welcome – success and failure of nations depends on success in international trade via the principle of circular and cumulative causation – it’s quite a drastic change from what Neochartalists have claimed before. From “exports are a cost and imports benefits”, they have shifted their position. Mitchell goes on to concede:These so-called ‘free trade’ agreements are nothing more than a further...

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Another Admission

A few days back I posted a link to a paper written by a top advisor the US government admitting that economists in general got fiscal policy quite wrong before the crisis.Now another admission, but this time from a non-orthodox economist.In a recent blog post, Bill Mitchell writes (on reforming the international institutional framework):…2. Macroeconomic stabilisation – support for national currencies in the face of problematic balance of payments.This function recognises that all nations...

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