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BlogWorking Paper Roundup 6/4/2014
June 04, 2014 Monetary Mechanics: A Financial View Éric Tymoigne “This paper presents an alternative framework that can be used to analyze monetary systems by drawing on the work of Smith, MacLeod, Knapp, Innes, Hawtrey, Keynes, Murad, Olivecrona, Wray, and Ingham, among others. The analysis asks what “money” is instead of what “money” does. Monetary instruments are not [...] Blog -
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Creationism versus Redemptionism: How a Money-Issuer Really Lends and Spends
June 10, 2014 MMT has emphasized that there is a close relation between sovereign power to issue a currency and its power to impose tax liabilities. For shorthand, we say “Taxes Drive Money.” I’ve dealt with that topic in the previous installments of this series on MMT’s view of taxes. We’ve also demonstrated (as if it needed demonstration!) [...] Blog -
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The Far Right and the European Elections
June 10, 2014 C. J. Polychroniou, reflecting on the results of the European Parliament elections: The stunning victory of Marine Le Pen’s National Front in France that came in first with 25 percent of the vote—when it had won less than 6.5 percent in the last European elections—is quite indicative of the general political and social trends in [...] Blog -
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Why Draghi’s New Measures Won’t Solve the Low Inflation Problem
June 11, 2014 In yesterday’s Financial Times, Jörg Bibow addressed Mario Draghi’s recent announcement that the ECB will take new steps (including cutting its deposit rate to -0.1 percent) in an attempt to deal with (or, one might argue, in an attempt to appear to deal with) the fact that inflation in the eurozone is too low, according to the [...] Blog -
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The Supposed Decade of Flat Wages Was Worse Than We Thought
June 12, 2014 It’s well known that the wages of US workers have become disconnected from productivity growth, with real wages growing much more slowly than advances in productivity over the last several decades. This is a key part of the story of widening income inequality. But these observed trends actually understate the degree to which working people have been [...] Blog -
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McCulley on Fed Policy, Inflation, and the Taylor Rule
June 13, 2014 Paul McCulley, a familiar face at Levy Institute events (he gave a keynote at our Rio conference and at last year’s Minsky Summer Seminar), is back at PIMCO and his first note is (predictably) worth a read. His latest essay looks at Federal Reserve policy from the standpoint of what McCulley terms the Fed’s “secular [...] Blog -
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Are German Savers Being Expropriated?
June 14, 2014 Last week the ECB’s governing council agreed on interest rate cuts and some fresh liquidity measures. The policy move has sparked off quite some excitement in all kinds of corners. Certainly financial markets highly welcomed the ECB’s much-awaited new easing initiative, with stock indices surging and bond yields plunging to record levels. International commentators generally [...] Blog -
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Tax Bads, Not Goods
June 17, 2014 This is another installment in the series on the MMT view of taxes. I’m back from China, participating in the annual Hyman P. Minsky Summer Seminar at the Levy Economics Institute. Yesterday my colleague, Mat Forstater, gave a talk on the job guarantee and “green jobs.” Along the way he made two particularly insightful comments [...] Blog -
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Inequality, Unsustainable Debt, and the Next Crisis
June 18, 2014 In The Guardian, Dimitri Papadimitriou warns that the combined forces of persistent inequality, shrinking government budgets, and the US trade deficit are setting the stage for another private-debt-driven financial crisis: Right now, America is wrestling a three-headed monster of weak foreign demand, tight government budgets and high income inequality, with every sign that these conditions [...] Blog -
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Daniel Alpert at the Minsky Summer Seminar
June 24, 2014 On Saturday, Daniel Alpert delivered the closing remarks at the Levy Institute’s Hyman P. Minsky Summer Seminar: Minsky had the rarely seen ability to stand back from all he had learned—even at times from his own mentors—and not only see and articulate what was misunderstood, what wasn’t working, but also to explain why conventional wisdom is often not [...] Blog -
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“Who Is Minsky and Why Should We Care?”
June 25, 2014 These two interview segments, with Marshall Auerback and Edward Harrison (at 23mins), feature some basic discussion of Hyman Minsky and his view of financial crises: [iframe width=”427″ height=”255″ src=”http://www.youtube.com/embed/ppjeupTYPz4?feature=player_detailpage&start=895″ frameborder=”0″ allowfullscreen></iframe] Blog -
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To Consolidate or Not to Consolidate, That Is the Question (or maybe it isn’t)
June 27, 2014 This is another short post on MMT, a sort of follow-up to my post from a couple of days ago. There was an interesting response to various comments on my piece, which was posted up on Mike Norman’s website. We got the typical: “oh you MMTers always want to consolidate the Fed and Treasury, but really [...] Blog -
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End of Week Links 6/27/2014
June 27, 2014 Ann Pettifor, “Out of thin air — Why banks must be allowed to create money” “In his regular column, Martin Wolf called for private banks to be stripped of their power to create money. Wolf’s proposals are radical, and would give a small committee – independent of the state – a monopoly on money creation. … Furthermore, Wolf argues, private [...] Blog -
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Something Is Rotten in the State of Denmark: The Rise of Monetary Cranks and Fixing What Ain’t Broke
June 30, 2014 Horatio: He waxes desperate with imagination. Marcellus: Let’s follow. ‘Tis not fit thus to obey him. Horatio: Have after. To what issue will this come? Marcellus: Something is rotten in the state of Denmark. Horatio: Heaven will direct it. Marcellus: Nay, let’s follow him. Hamlet Act 1, scene 4 Marcellus is right, the Fish of [...] Blog -
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Stiglitz, Galbraith, and Milanovic on Inequality
July 03, 2014 From Columbia University’s Heyman Center for the Humanities: [iframe src=”http://player.vimeo.com/video/99560896″ width=”450″ height=”253″ frameborder=”0″ webkitallowfullscreen mozallowfullscreen allowfullscreen></iframe> <p><a href=”http://vimeo.com/99560896″>Highlights: Joseph Stiglitz, James K. Galbraith, and Branko Milanovic on “Global Inequality”</a> from <a href=”http://vimeo.com/heymancenter”>Heyman Center/Society of Fellows</a> on <a href=”https://vimeo.com”>Vimeo</a>.</p] Blog -
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Predatory Capitalism and the System’s Denial in the Face of Truth
July 07, 2014 Contemporary capitalism is characterized by a political economy which revolves around finance capital, is based on a savage form of free market fundamentalism, and thrives on a wave of globalizing processes and global financial networks that have produced global economic oligarchies with the capacity to influence the shaping of policymaking across nations. As a result, [...] Blog -
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Greece: The Impact of Austerity on Migration
July 11, 2014 The chart above documents another striking feature of the impact of the recession on Greece. The Hellenic Statistical Authority (ElStat) has recently released the new quarterly data on employment and the labor force, which includes a measure of the population aged 15 or more (Table 1). While the series published in the previous release exhibited [...] Blog