By Stephanie Kelton
Scott Fullwiler spent part of the afternoon reading (and reacting to) a paper that John Cochrane just gave at a conference on central banking in Stanford, CA. I haven’t read the paper yet, but judging by Scott’s reaction on Twitter, there’s lots to like about it. (Mostly because it appears to draw heavily from a broad swath of at least a decade of published work from MMTers.)
We’ll have to wait for Scott’s forthcoming post to see just how close the parallels are (and how much Cochrane 2014 departs from Cochrane 2009). It will be interesting, particularly because several years ago Cochrane wasn’t interested in garnering insight from outside the mainstream. “Every now and then,” he confessed, “there’s an excluded subgroup that turns out to be right.” But he readily admitted — nay, disparaged – “I haven’t read their specific work. I’m busy, and I try to read what is considered interesting and valid.” Being right matters, and I think that’s why MMT has begun to seep into the mainstream. The risk (though this is not how Noah sees it) is that “all the interesting heterodox ideas [will] quickly get incorporated into the mainstream in some slightly bastardized form,” leaving the discipline as a whole only marginally better off, while those who did the heavy lifting remain at the margins.
Stephanie’s latest podcast. This episode is a broad-ranging discussion of conventional economics and the heterodox alternatives to IS/LM, Ricardian equivalence, among others.
Stephanie’s latest podcast. She talks with UMKC Economist Dr. Fred Lee about the micro/maco distinction, Post-Keynesian price theory, the problems with neoclassical economics and his ideas about how to move the discipline in a more useful direction. (Note: There are some audio quality issues but only for the first 30 seconds).
(Updated – slides added)
Stephanie Kelton’s keynote address to the students, faculty, and visitors at Augustana College’s (Sioux Falls, SD) Undergraduate Research Symposium on Saturday, April 12, 2014 at 10am. Stephanie begins at 2:40. The topic of the keynote is Debt and Deficits in the Modern Economy. The slides are available below the video.
What gives money its value? PBS explores. You can check it out here.
American economist Hyman Minsky died in 1996, but his theories offer one of the most compelling explanations of the 2008 financial crisis. His key idea is simple enough to be a t-shirt slogan: “Stability is destabilising”.
BBC Radio 4′s Analysis program has an episode on Minsky and looks at topics such as:
- In the aftermath of the financial crisis, why did Minsky die an outsider?
- What do his ideas say about the response to the 2008 crisis and current policies like Help to Buy?
- And has mainstream economics done enough to respond to its own failure to predict the crisis and the challenge posed by Minsky’s ideas?
By Chris Mayer*
Warren Mosler tells a good story that shows how our economy works at its most basic level.
Imagine parents create coupons they use to pay their kids for doing chores around the house. They “tax” the kids 10 coupons per week. If the kids don’t have 10 coupons, the parents punish them. “This closely replicates taxation in the real economy, where we have to pay our taxes or face penalties,” Mosler writes.
By Stephanie Kelton
It’s been five-and-a-half years since the US economy officially went into recession and three-and-a-half years since we entered the “recovery” phase of the business cycle. While technically in “recovery,” it’s no secret that when it comes to the labor market, workers are suffering the weakest turnaround in the post-WWII era.
And despite what you may have read, the truth is we’re still nowhere near full employment — at least not if you’re honest and you’re counting everyone who wants full-time work and can’t get it.