Randall Wray: ¿Austeridad presupuestaria frente a déficits públicos?

Why the EMU is designed to Fail

Randy’s presentation for FUHEM in Madrid, Spain coinciding with the release of the spanish version of his Modern Money Primer. The introductions are in spanish and Randy speaks in english beginning at about 10:00 with a panel member translating to spanish. He presents  Modern Money Theory and then what is wrong with the Euro/EMU.  

2 responses to “Randall Wray: ¿Austeridad presupuestaria frente a déficits públicos?

  1. Jerry Hamrick

    This was a very informative discussion. Thanks.

    My video was perfect except at one point around 1:51. I heard you say, “Liberals” want powerful corporations to do all the [financial] planning.

    I hope that you actually said, “Neoliberals” want those things.

    I was glad to hear you say “trying to pretend that economics is a science, almost mathematics, began a long time ago and it just completely took over mainstream economics.” I will be quoting you.

    I haven’t watched very many of your videos, but I have read your books and it seems to me that you were much more direct in this case. You spoke in plain language about the weaknesses of the economic systems of the EU and of the US. It was good to hear you be explicit.

    Thanks again, and if there are any other books or videos of yours that I should read/watch, please let me know.

  2. Rob Parenteau

    Great presentation!

    Though there may be a slip of the tongue at 41 minutes in.

    The video skips a bit right there so I may have this wrong, but I heard this:

    “Payment deficits either in the external sector or the domestic private sector create budget deficits.”

    Yet a) we are dealing with an ex post accounting identity here, so you have to be careful about attributing causation, and b) the algebra of the macro financial balance identity/equation is such that:

    DPSFB + GFB – CUB = 0



    so GFB CUB

    See also chart 3 on p. 6 from Jan’s application of the Godley macrofinancial balance map for the visual equivalent of this condition


    You will notice fiscal deficits (the area to the left of the dotted 45 degree line) are possible under a variety of combinations of domestic private sector financial balance and current account balance states.

    Fiscal deficits do not just occur when there is a current account deficit and/or a domestic private sector financial deficit.

    I know you all know this, and I do not want someone to try to undermine your case by calling this out. And you know they will try to pull a stunt like that too. Cheap shots and obfuscation are all they have. Because people like Randy and others have honed this message so good in the past few years.