Tag Archives: MMT

Comparing Unemployment During the Great Depression and the Great Recession

Posted on April 5, 2013 by Devin Smith | 4 comments

Barry Eichengreen’s and Tim Hatton’s January 1988 paper entitled “Interwar Unemployment in International Perspective” is a useful starting point for any effort to compare unemployment during the Great Depression and the Great Recession.

It is useful to begin by recognizing three related cautions that the authors make in that paper. First, the modern sense of the term “unemployment” (willing and able to work, but unable to find a job commensurate with the worker’s skills) was not common until the decades before the Great Depression. The prior assumption was that people were unemployed because they were lazy. There was little understanding of business cycles or inadequate demand, little sympathy for the unemployed, and no sense that business or government were primarily responsible for the the level of unemployment. This meant that keeping data on unemployment was rarely a concern of government. Data on unemployment in Europe was largely collected through industrial trade unions.

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4 Comments

Posted in William K. Black

Tagged austerity, Eurozone, MMT, Modern Monetary Theory, unemployment

The Love of Money

Posted on April 3, 2013 by Devin Smith | 2 comments

NEP’s Randy Wray appeared on radioLitopia discussing Money, Banksters, Austerity and other issues. You can listen using the player below or visit radioLitopia’s site [some have reported having problems with the embedded player].

Via Radio Litopia

2 Comments

Posted in L. Randall Wray

Tagged austerity, banksters, MMT

BACK TO THE FUTURE: MODERN MONEY CONFERENCE IN 1999

Posted on March 30, 2013 by Devin Smith | 19 comments

By L. Randall Wray

I thought readers might enjoy taking a peek back in time to 1999, to a conference organized at the New School by Stephanie Bell (Kelton), Mat Forstater and Edward Nell. This was pre-UMKC, just before we made the big move. The Center for Full Employment and Price Stabililty was housed at the Levy Economics Institute and Ms. Bell was pursuing a PhD. I’m including the conference program, my outline, and my notes for presentation. Note that the conference was organized around Charles Goodhart’s presentation, based on his deservedly famous article, “The Two Concepts of Money”, published in the European Journal of Political Economy in 1998. Hence in my presentation, I adopt his taxonomy of approaches to money as the “M form” (metalist or monetarist) and the “C form” (cartalist or chartalist or state money). You will see that it’s all there–the basics of what became MMT: state money of account, taxes drive money, endogenous (private) money, and labor bufferstock to stabilize prices.

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19 Comments

Posted in L. Randall Wray

Tagged MMT, Modern Monetary Theory

A Plague on All Your Budgets

Posted on March 26, 2013 by Devin Smith | 47 comments

By Joe Firestone

The Sector Financial Balances Model:

Domestic Private Balance + Domestic Government Balance + Foreign Balance = 0

is an accounting identity that provides a focus for macroeconomic analysis, explanation, and prediction by economists applying the Modern Money Theory (MMT) approach. It leads to a very critical line of thinking about the budget deficit projections produced for our consumption by the Congressional Progressive Caucus (CPC), Congressional Budget Office (CBO), the House, and the Senate. The US has recently had a sharp decline in its balance of trade deficit. It now stands at about 3% of GDP; which means that the rest of the world has a surplus, a balance of +3% of US GDP in its annual trade with the United States. Continue reading →

47 Comments

Posted in Joe Firestone

Tagged #PCS, 2013 budgets, CBO, CPC, Fiscal Policy, High Value Platinum Coin Seigniorage, House budget, MMT, paul ryan, Senate budget, Trillion Dollar Coin

Why MMT is Right and the Dreamers are Wrong: Kaldor Versus the Kaldorians

Posted on March 20, 2013 by Devin Smith | 298 comments

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil

Dreaming, I was only dreaming
I wake and I find you asleep

– Billie Holiday “Gloomy Sunday”

The criticisms of Modern Monetary Theory (MMT) on the internet and in academia can be placed into three categories: the cranks; the nit-pickers; and the Kaldorians. The cranks make up by far the largest group. These are the people that simply have not bothered to understand the theory. These, which include some prominent academics, say things like: “The MMTers say that deficits don’t matter; they forgot about hyperinflation!” These people can usually be safely ignored as they are not arguing in good faith. Continue reading →

298 Comments

Posted in Guest Blogger

Tagged kaldor, MMT, Modern Monetary Theory

O’Donnell Thinks Krugman is “a lonely voice opposing austerity” because he listens to MSNBC

Posted on March 19, 2013 by Devin Smith | 14 comments

By William K. Black

On March 18, 2013, Lawrence O’Donnell stated that John Boehner’s admission that the U.S. faces no current debt crisis vindicated Paul Krugman, who O’Donnell described as “a lonely voice opposing austerity.” It is true that Krugman has been a strong opponent of austerity and has been proven correct. It is also true that MSNBC has frequently portrayed Krugman as an isolated, virtually sole opponent of austerity. Continue reading →

14 Comments

Posted in William K. Black

Tagged austerity, MMT, Modern Monetary Theory, msnbc

What is Modern Monetary Theory, or “MMT”?

Posted on March 11, 2013 by Devin Smith | 109 comments

By Dale Pierce

Introduction

Modern Monetary Theory is a way of doing economics that incorporates a clear understanding of the way our present-day monetary system actually works – it emphasizes the frequently misunderstood dynamics of our so-called “fiat-money” economy. Most people are unnerved by the thought that money isn’t “backed” by anything anymore – backed by gold, for example. They’re afraid that this makes money a less reliable store of value. And, of course, it is perfectly true that a poorly managed monetary system, or one which is experiencing something like an oil-price shock, can also experience inflation. But people today simply don’t realize how much bigger a problem the opposite condition can be. Under the gold standard, and largely because of the gold standard, the capitalist world endured eight different deflationary slumps severe enough to be called “depressions.” Since the gold standard was abolished, there have been none – and, as we shall see, this is anything but coincidental.

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109 Comments

Posted in Guest Blogger

Tagged MMT, Modern Monetary Theory

Is It Really About “Dysfunctional” Partisanship?

Posted on March 9, 2013 by Devin Smith | 24 comments

By Joe Firestone

The popular narrative in Washington, DC these days among the MSM pundits is that the Congress is “dysfunctional” in the sense that it is very difficult for it to pass a budget and rise above periodic “fiscal” “debt” and “deficit” crises. This difficulty is attributed to the failure of our representatives to rise above their party interests and to accept compromises proposed by “adults” such as the President, which would, it’s claimed, resolve our long term “fiscal sustainability”/”fiscal responsibility” problem through a “balanced” long-term $4 Trillion deficit reduction plan.

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