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84 publications found, searching for 'Money '

  • Working Paper No. 1076 February 07, 2025

    The Rise of the Modern Monetary System

    L. Randall Wray
    Abstract

    This working paper integrates the credit money approach (associated with Post Keynesian endogenous money theory) with the state money approach (associated with Modern Money Theory) by drawing on Wray’s 1990 book (Money and Credit in Capitalist Economies: The Endogenous Money Approach, Edward Elgar), his 1998 book (Understanding Modern Money: the Key to Full Employment and […]

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  • Working Paper No. 1071 December 10, 2024

    Tilting at Windmills

    James K. Galbraith, and Pavlina R. Tcherneva
    Abstract

    Originally issued as EDI Working Paper No. 14, May 2023 The Central Bank of the United States, the Federal Reserve, has a dual mandate to maintain both full employment and price stability. However, inflation-fighting had always eclipsed the full employment objective without much accountability. Today, the Federal Reserve provides regular testimony before Congress on how […]

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  • Working Paper No. 1070 December 10, 2024

    Notes on Money as Technology

    Raúl A. Carrillo
    Abstract

    Originally issued as EDI Working Paper No. 20, June 2024 Scholars and affiliates of the Levy Economics Institute have long demonstrated a granular understanding of the “operations” of money, which entails understanding the financial system’s law and technology (Grey 2019, Tymoigne 2014, Fullwiler 2010, Bell and Wray 2002-3, Bell 2000). During the dot-com bubble, many […]

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  • Working Paper No. 1068 December 10, 2024

    Monetary Power and Vulnerability to Sovereign Debt Crises

    Karina Lima
    Abstract

    Originally issued as EDI Working Paper No. 17, March 2024 This paper challenges the prevailing view in the sovereign debt literature by arguing that sovereign debt markets, in many respects, behave similarly to other credit markets. These markets are hierarchical rather than flat, inherently hybrid in nature, blending elements of public order and private markets, […]

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  • Working Paper No. 1067 December 06, 2024

    Revisiting the Foreign Debt Problem and the “External Constraint” in the Periphery

    Ndongo Samba Sylla
    Abstract

    Originally issued as EDI Working Paper No. 16, March 2024 Most debates and policy proposals about Global South countries’ external debt problem take for granted the view that it is normal for their governments to issue debts denominated in foreign currencies. This paper tries to challenge this widely held and usually unquestioned assumption by relying […]

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  • Working Paper No. 1065 December 06, 2024

    Resource Constraints and Economic Policy

    Yeva Nersisyan
    Abstract

    Originally issued as EDI Working Paper No. 09, 2023 This paper explains the MMT approach for evaluating the affordability of spending programs, contrasting it with the mainstream approach. Using the examples of the Green New Deal, Medicare-for-All, and Build Back Better, it argues that rethinking spending and taxes as claims on, and releases of resources, […]

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  • Working Paper No. 1064 December 06, 2024

    Seismic Shifts in Economic Theory and Policy from the Bernanke Doctrine to Modern Money Theory

    Pavlina R. Tcherneva, and Éric Tymoigne
    Abstract

    Originally issued as EDI Working Paper No. 08, 2022  This paper evaluates the relationship between monetary and fiscal policy and the relative effectiveness of macroeconomic stabilization through the lens of Modern Money Theory (MMT). We articulate previously-neglected aspects of monetary sovereignty to offer a new interpretation of the Bernanke Doctrine that emerged in the wake of […]

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  • Working Paper No. 1062 December 03, 2024

    The Value of Money

    L. Randall Wray
    Abstract

    This paper examines heterodox theories of the determinants of the value of money. Orthodox approaches that tie money’s value to relative scarcity of money or to the price level are rejected as inconsistent with the monetary theory of production embraced by heterodox traditions linked to Marx, Veblen, and Keynes. This paper examines and integrates (1) […]

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  • Working Paper No. 1061 November 26, 2024

    Modern Money Theory on Fiscal and Monetary Policies

    Éric Tymoigne
    Abstract

    Originally issued as EDI Working Paper No. 04, 2022 Drumetz and Pfister make several claims about the inadequacy and fallacies of Modern Money Theory (MMT) and conclude that MMT is nothing more than a political manifesto; there are no theoretical and empirical foundations behind it. This paper addresses this last point by focusing on the […]

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  • Working Paper No. 1060 November 26, 2024

    The Job Guarantee

    Pavlina R. Tcherneva
    Abstract

    Originally issued as EDI Working Paper No. 02, 2022 Orthodox economic theory presents the policy maker with an impossible choice: eradicate unemployment at the cost of undesirable inflation or keep prices stable by maintaining some level of involuntary unemployment. This is the canon, as embodied in the natural rate of unemployment theory and the Non-Accelerating […]

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  • Working Paper No. 1058 November 20, 2024

    The Origins of the Platonic Approach to Monetary Systems

    Éric Tymoigne
    Abstract

    A monetary approach that combines Chartalism, Nominalism, and Command origins of monetary systems is often deemed to have emerged only recently, while the Aristotelian approach (Commodity, Metallism, and Market origins of monetary systems) is the only one that existed until the end of the eighteenth/early-nineteenth century. In the major studies of the history of monetary […]

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  • Strategic Analysis November 05, 2024

    Economic Challenges of the New U.S. Administration

    Dimitri B. Papadimitriou, Nikolaos Rodousakis, Giuliano Toshiro Yajima, and Gennaro Zezza
    Abstract

    On the eve of the 2024 US presidential election, the authors share their latest macroeconomic projections using the Levy Institute’s tailored stock-flow consistent model and evaluate two alternative policy scenarios, depending upon the next occupant of the White House: (1) a significant increase in import tariffs and decrease in the marginal tax rate, and (2) a substantial increase in government expenditure paired with an increase in the marginal tax rate.

    Download Strategic Analysis November 2024 PDF (673.85 KB)
  • Policy Notes No. 1 October 11, 2024

    The Boy Who Cried Wolf About Government Debt

    Yeva Nersisyan, and L. Randall Wray
    Abstract

    In a New York Times editorial, David Leonhardt recounts Aesop’s apocryphal story about the boy and the wolf, warning that while deficit hawks have so far been wrong, the growing government debt will eventually bite. He reports the economic plans of both presidential candidates would add to the debt that will soon exceed GDP and grow to 130 percent of annual output under a President Harris, or 140 percent with a Trump presidency.

    The story of the boy and the wolf was a fable, although it was within the realm of possibility. The fable of the debt wolf is not. While there are real world wolves—Leonhardt mentions climate catastrophe and autocratic leaders, and the authors would add rising inequality and the concentration of economic and political power in the hands of billionaires—authors Yeva Nersisyan and L. Randall Wray assert, federal debt is not one of them.

    Download Policy Note 2024/1 PDF (368.08 KB)
  • Working Paper No. 1057 October 09, 2024

    Rise and Fall of Mexican Super Peso: Heterodox Perspective versus Orthodoxy

    Laura Lisset Montiel-Orozco
    Abstract

    This working paper contrasts the neo-Keynesian and post-Keynesian theories of monetary policy for an open economy, highlighting the irrelevance of the orthodox theory and the explanatory capacity of heterodoxy for an emerging economy such as Mexico. It focuses on the role of the central bank and the case of the Mexican currency during the economic […]

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  • Working Paper No. 1055 September 18, 2024

    The Relation Between Budget Deficits and Growth: Complicated but Clear

    L. Randall Wray, and Eric Lin
    Abstract

    This paper looks at the relationship between government budget deficits and the growth rate of GDP. While orthodox economic theory offers several reasons to believe that growing deficits might be associated with slower growth, and would ultimately be unsustainable, Keynesians assert that deficits could stimulate growth—at least in the short run—implying the relation between deficits […]

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  • Working Paper No. 1052 June 05, 2024

    Exchange-Rate Stability Causes Deterioration of the Productive Sphere and Destabilizes Developing Economies

    Arturo Huerta G.
    Abstract

    For Matías Vernengo and Esteban Pérez Caldentey (2020), the MMT literature overemphasizes the choice of the exchange rate regime and the relevance of a flexible exchange rate regime, as well as the ultimate effect of that choice upon the policy space. In addition, they argue that the role of capital flows is underexplored, and that […]

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  • Working Paper No. 1035 January 04, 2024

    The Swedish Monetary System from a Balance Sheet Perspective

    Dirk Ehnts, and Jussi Ora
    Abstract

    In this paper, we discuss the balance sheet mechanics of the Swedish government. We examine spending, government bond purchases, and tax payments. As long as the Swedish central bank, which is created through Swedish laws, supports the Swedish central government, it cannot run out of money. The Swedish government therefore plays a large role in […]

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  • Working Paper No. 1023 July 14, 2023

    Climate Change and Fiscal Marksmanship

    Lekha S. Chakraborty, Amandeep Kaur, Ajay Narayan Jha, and Balamuraly B
    Abstract

    According to the theory of efficient markets, economic agents use all available information to form rational expectations. The rational expectations hypothesis asserts that information is scarce, the economic system generally does not waste information, and that expectations depend specifically on the structure of the entire system. Fiscal marksmanship—the accuracy of budgetary forecasting—can be one important […]

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  • Working Paper No. 1015 February 20, 2023

    CBDC Next-Level: A New Architecture for Financial “Super-Stability” 

    Biagio Bossone, and Michael Haines
    Abstract

    Fractional reserve regimes generate fragile banking, and full reserve regimes (e.g., narrow banking) remove fragility at the cost of suppressing the role of banks as lenders. A Central Bank Digital Currency (CBDC) could provide safe money, but at the cost of potentially disrupting bank lending. Our aim is to avoid this potential disruption. Building on […]

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  • One-Pager December 07, 2022

    The Causes of Pandemic Inflation

    L. Randall Wray
    Abstract

    While the trigger for the Covid recession was unusual—a collapse of the supply side that produced a drop in demand—the inflation the US economy is now facing is not atypical, according to L. Randall Wray. In this one-pager, he explores the causes of the current inflationary environment, arguing that continuing inflation pressures come mostly from […]

    Download One-Pager No. 70 PDF (128.13 KB)
  • Working Paper No. 996 December 13, 2021

    Seven Replies to the Critiques of Modern Money Theory

    Abstract

    Modern Money Theory (MMT) has generated considerable scrutiny and discussions over the past decade. While it has gained some acceptance in the financial sector and among some politicians, it has come under strong criticisms from all sides of the academic spectrum and from conservative political circles. MMT has been argued to be both fascist and […]

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  • One-Pager No. 68 November 01, 2021

    Are Concerns over Growing Federal Government Debt Misplaced?

    L. Randall Wray
    Abstract

    With the US Treasury cutting checks totaling approximately $5 trillion to deal with the COVID-19 crisis, Senior Scholar L. Randall Wray argues that when it comes to the federal government, concerns about affordability and solvency can both be laid to rest. According to Wray, the question is never whether the federal government can spend more, […]

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  • Working Paper No. 992 August 31, 2021

    Modeling Monopoly Money

    Sam Levey
    Abstract

    Many of the claims put forth by Modern Monetary Theory (MMT) center around the state’s monopoly over its own currency. In this paper I interrogate the plausibility of two claims: 1) MMT’s theory of the price level—that the price level is a function of prices paid by government when it spends—and 2) the claim that […]

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  • Working Paper No. 985 February 08, 2021

    Has Japan Been Following Modern Money Theory Without Recognizing It?

    L. Randall Wray, and Yeva Nersisyan
    Abstract

    Modern Money Theory (MMT) economists have used Japan as an example of a country that demonstrates that high deficits and debt do not lead to insolvency, high interest rates, or inflation. MMT insists that governments that issue their own sovereign currency cannot be forced into insolvency, that they can make all payments as they come […]

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Blithewood
Bard College
Annandale-on-Hudson, NY 12504-5000
845-758-7700
The Levy Economics Institute of Bard College, founded in 1986 through the generous support of Bard College trustee Leon Levy, is a nonprofit, nonpartisan, public policy research organization. The Levy Institute is independent of any political or other affiliation, and encourages diversity of opinion in the examination of economic policy issues while striving to transform ideological arguments into informed debate.