2012

Sovereignty In The Euro Area

18 May 2012

Nouriel Roubini tweets about Trichet’s plan to save the Euro Zone and wonders about sovereignty: Trichet proposes EU’s full takeover of fiscal policy of bankrupt countries. It totally undermines national sovereignty reut.rs/JXuawK — Nouriel Roubini (@Nouriel) May 18, 2012 Two things: My guess is Trichet’s plan involves a Euro Area institution setting fiscal policy. Trichet’s plan [...]

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End This Depression Now!: Amy Goodman Interviews Paul Krugman

17 May 2012

Worth your time. Krugman interview starts at 24:00

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Spanish Banks, Banco de España & TARGET2

15 May 2012

In two big operations in December and February, the Eurosystem lent around €1tn to banks in the Euro Area: (click to expand, source: ECB) Spanish banks it seems borrowed around €315bn (gross) as per the recently the Banco de España released statistic Financing In The Eurosystem (April 2012): (click to expand) Due to the continuing capital flight out [...]

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Kaldor On Keynes

10 May 2012

Good read on the Keynesian principle of effective demand and the practice of Keynesianism till it was abandoned using faulty reasoning in the 70s and 80s. Nicholas Kaldor from 1983:

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Born In The U.S.A. – MMT And Monetary Sovereignty

6 May 2012

In my previous post on government defaults and its connection to open economies, I had a comment from Sergio Cesaratto (who is full professor of Economics at the University of Siena (Italy)) which I liked. Since I don’t publish comments, I asked him if I could promote it to a post and he sent me an updated version [...]

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The Monetary Economics Of Sovereign Government Rating

4 May 2012

If a government (outside monetary unions) can make a draft at the central bank, why do rating agencies rate governments’ creditworthiness? In this post, I will attempt to describe the dynamics of defaults and restructurings by going through some monetary economics of open economies. Carmen Reinhart and Kenneth Rogoff wrote a book in 2009 titled This [...]

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Private Indebtedness In CBO’s Forecasts

29 April 2012

Michael Stephens of the Levy Institute highlights the recent Levy Institute Strategic Analysis: Back To Business As Usual? Or A Fiscal Boost? in a post Where Will US Growth Come From If Austerity Reigns on the Institute’s blog Multiplier Effect.  According to the authors Dimitri Papadimitriou, Gennaro Zezza and Greg Hannsgen, The results of our simulation [...]

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Debt Monetization

22 April 2012

Let us take the public sector budget equation: G – T = ΔH + ΔB Inspired by Milton Friedman’s popularity in the 1970s and the 80s, most textbooks and journal articles incorrectly claim that the central bank “controls” the money stock (such as M0, M1, M2 etc). Simultaneously they also claim – rightly – that the central [...]

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Seven Unsustainable Processes – Original

18 April 2012

Of all the economists, Wynne Godley had the rarest of rare ability to model and imagine the economic dynamics of the whole world. “… a full macroeconomic model in his head, which, by some sort of subconscious process, he computed.” as his obituary from FT said. In the recent INET conference paper, Dirk Bezemer discusses Wynne [...]

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G&L’s Monetary Economics – Second Edition

15 April 2012

I got my copy of Monetary Economics by Wynne Godley and Marc Lavoie yesterday. I know some people were waiting for the second edition of the book, and had postponed their purchase to get the newer edition – so they can get it now! There aren’t any changes in this edition – except for correction [...]

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