August 2011

Payment Systems And Settlement

31 August 2011

Few posts back, in More On Horizontalism, it was mentioned how loans make deposits. The unanswered question in the post was If loans make deposits, why do banks require funding? That will still be left unanswered for the time being, but in this post we will discuss simple payment systems and settlement. Hopefully it was clear […]

READ MORE >>

Obama And Merkel Call For Concerted Action

28 August 2011

Via Reuters Barrack Obama and Angela Merkel spoke on the phone over the weekend and agreed on the importance of concerted action. “The two leaders agreed on the importance of concerted action, including through the G20, to address current economic challenges and to spur growth and job creation in the global economy,” the statement said.

READ MORE >>

The Globalization Paradox

27 August 2011

I am reading Dani Rodrik’s The Globalization Paradox and borrowed the title for this post. I am curious as to what Barry Eichengreen has to say in his talk at the Federal Reserve’s annual forum at Jackson Hole, Wyoming. He is the author of the book Exorbitant Privilege: The Rise And Fall Of The Dollar And The […]

READ MORE >>

Chart: Fiscal Transfers

19 August 2011

Wynne Godley used to say that fiscal transfers happen without anyone really noticing. From The Economist, fiscal transfers in the US (finally gets noticed!):

READ MORE >>

Nationalistic Solutions?

13 August 2011

A few posts back, I refered to an article by James Tobin [1]. It has a nice but pessimistic ending: Coordination of macroeconomic policies is certainly not easy; maybe it is impossible. But in its absence, I suspect nationalistic solutions will be sought – trade barriers, capital controls, and dual-exchange rate systems. Wars among nations […]

READ MORE >>

r < g Or DEF < g ?

12 August 2011

It is frequently asserted by some economists and even some Post-Keynesians that as long as the effective interest rate paid on stocks of debt is less than the growth rate, stock-flow-norms do not keep rising forever. That is, ratios such as public debt/gdp, external debt/gdp do not rise forever at full employment if this condition is […]

READ MORE >>

More On Horizontalism

11 August 2011

Horizontalism, Endogenous Money and ideas such as that were brought into Macroeconomics by Nicholas Kaldor. In [1] he wrote Diagrammatically, the difference in the presentation of the supply and demand for money, is that in the original version, (with M exogenous) the supply of money is represented by a vertical line, in the new version […]

READ MORE >>

Chart: Bank Of England Tracks Financial Balances!

10 August 2011

Today the Bank of England was out with its quarterly Inflation Report and I happened to find a graph which tracks the sectoral balances. Here it is Not sure why it leaves out financial corporations though.

READ MORE >>

Coordinated Action? G7 Statement

8 August 2011

Via G8 Information Centre Statement of G7 Finance Ministers and Central Bank Governors August 8, 2011 In the face of renewed strains on financial markets, we, the Finance Ministers and Central Bank Governors of the G-7, affirm our commitment to take all necessary measures to support financial stability and growth in a spirit of close […]

READ MORE >>

Chart: Eurozone Indebtedness

7 August 2011

The Euro Zone is under a crisis. Is there a chart which shows what the underlying factor is which makes the difference ? Below: You can see that the external situation is clearly the one which makes the difference as opposed to the public debt. It’s true that Belgium’s bond market is under pressure – […]

READ MORE >>