Macro modelling MMT

“The accounting identities equating aggregate expenditures to production and of both to incomes at market prices are inescapable, no matter which variety of Keynesian or classical economics you espouse. I tell students that respect for identities is the first piece of wisdom that distinguishes economists from others who expiate on economics. The second? … IdentitiesContinue reading “Macro modelling MMT”

MMT, Minsky, Marx and the money fetish

Recently the former deputy governor at the Bank of Japan Kikuo Iwata argued that Japan must ramp up fiscal spending with any increased public sector debt bankrolled by the central bank.  This ex-governor seems to have adopted Modern Monetary Theory (MMT), or at least a version of Keynesian-style deficit spending as a ‘radical’ (or isContinue reading “MMT, Minsky, Marx and the money fetish”

MMT 3 – a backstop to capitalism

After two long and possibly turgid posts analysing Modern Monetary Theory, in this third post, I’m going to look at the practicalities – in other words, what are the policy proposals that MMTers put forward for the government to do in order to get more jobs at better wages and without provoking inflation? Since theContinue reading “MMT 3 – a backstop to capitalism”

MMT 2 – the tricks of circulation

In my first post on Modern Monetary Theory (MMT), I offered a general analysis of the theory, its similarities and differences with Marx’s theory of money; and some of the policy implications of the MMT and its usefulness for the labour movement. In this post, I want to delve deeper into the analytics of MMT. Continue reading “MMT 2 – the tricks of circulation”

Deficits, debt and deflation after the pandemic

The Great Lockdown enforced by the COVID-19 pandemic has driven governments across the globe to apply extensive bailout and fiscal stimulus programmes.  On average, these measures of wage supplements, furlough payments, loans and grants to firms; and emergency spending on health and other public services, have been paid for by extra government spending equivalent toContinue reading “Deficits, debt and deflation after the pandemic”

The deficit myth

Stephanie Kelton is  professor of economics and public policy at Stony Brook University, a former Chief Economist on the U.S. Senate Budget Committee (Democratic staff) and was an economic policy adviser to Senator Bernie Sanders, the leftist American presidential hopeful.  Kelton is a prominent exponent and populariser of what is called Modern Monetary Theory (MMT).Continue reading “The deficit myth”

Profitability, investment and the pandemic

Last week’s speech by US Federal Reserve Chair Jay Powell at the Peterson Institute for International Economics, Washington was truly shocking.  Powell told his audience of economists that “The scope and speed of this downturn are without modern precedent”. One shocking fact that he announced was that, according to a special Fed survey of ‘economic well-being’Continue reading “Profitability, investment and the pandemic”

The post-pandemic slump

The coronavirus pandemic marks the end of longest US economic expansion on record, and it will feature sharpest economic contraction since WWII. The global economy was facing the worst collapse since the second world war as coronavirus began to strike in March, well before the height of the crisis, according to the latest Brookings-FT trackingContinue reading “The post-pandemic slump”

Japan: Abenomics revisited

The news that Japan’s real GDP dropped sharply in the last quarter of 2019 and the economy appears to be entering a new ‘technical’ recession (two consecutive quarterly contractions) in 2020 has produced a reaction from mainstream economics. The worry is that ‘Abenomics’ – the economic policy approach of the current Liberal Democrat prime minister,Continue reading “Japan: Abenomics revisited”