by Summary:
Professor Radzicki is an economist, creator of WPI’s program in system dynamics, and co-creator of WPI’s program in trading and investment system development. He received his Ph.D. in economics from the University of Notre Dame and his training in system dynamics computer simulation modeling from the Massachusetts Institute of Technology. In addition, he is a certified Rapid-I Predictive Analytics Analyst.
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Professor Radzicki is an economist, creator of WPI’s program in system dynamics, and co-creator of WPI’s program in trading and investment system development. He received his Ph.D. in economics from the University of Notre Dame and his training in system dynamics computer simulation modeling from the Massachusetts Institute of Technology. In addition, he is a certified Rapid-I Predictive Analytics Analyst.
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| Professor Radzicki is an economist, creator of WPI’s program in system dynamics, and co-creator of WPI’s program in trading and investment system development. He received his Ph.D. in economics from the University of Notre Dame and his training in system dynamics computer simulation modeling from the Massachusetts Institute of Technology. In addition, he is a certified Rapid-I Predictive Analytics Analyst. |
Always fun for the live stream.
Now to the abuse 🙂
Econ 1a says bank loans put 'savings' back into circulation and y'all are all edge lord happy saying that "commercial banks don't lend deposits! Har Har pwned you, you peasant!"
but this was _never the point_, the point is savings are supposed to be put back into circulation and the question was always _why this isn't sufficient_.
So in my economic peasantry this equates to y'all proudly saying that commercial banks do not put "savings/deposits/whatever edge-lordy neo concept economists are using" back into circulation.
If this is correct (and feel free to pull out the next edge lord explanation), then it stands to reason that of course some entity must generate 'fresh money' in order to sustain the economy. The only entity that can do this with endogenous money is the government.
MMT seems to be basically saying that banks fail to put existing means of exchange back into circulation.
Nope. Private banks create money by expanding their assets and their liabilities simultaneously. The government creates money by going into negative equity for itself, creating an identical positive equity for the non-bank private sector. MMT hasn't focused on the former–that's been my speciality–but the two approaches to money are eminently compatible and are much stronger together.
@ProfSteveKeen I've watched your own MMT explainer, I already know that explanation. I have not forgotten it, yet y'all never seem to want to get beyond that.
Again elementary econ asserts the virtue of lending is to put 'savings' in circulation. If lending is not doing that, then is this a problem because the only way commerce is kept alive is by deepening gov debt.
Also I am questioning the validity of calling the loan ASSET money. It is a claim on money*. The asset can be sold to another institution *for money, or exchanged in repos, as such their worth is subject to asset ratings like CDSs were. All those assets vaporize if the economy tanks or get washed away in Winter storms.
Great show guys. Always enjoyable.
Thank u for watching!
I've been doing all my system modeling in Python, but I'm interested to try Minsky out. I don't do much economic stuff but more electronics and motor controls. Thanks for all your hard work, Prof. Keen & team.
I should add that I'm tired of my discipline being held hostage by Matlab. Students should be able to have ownership of their own skills.