January 2012


30 January 2012

In an article (obituary), Nicholas Kaldor, 12 May 1908-30 September 1986, Geoff Harcourt said: Nicholas Kaldor’ resembled Keynes more than any other twentieth-century economist because of the breadth of his interests, his wide-ranging contributions to theory, his insistence that theory must serve policy, his periods as an adviser to governments, his fellowship at King’s and, of course, his membership of the […]


The (Almost) Irrelevance Of Reserve Requirements

29 January 2012

Earlier this week, the Reserve Bank of India reduced banks’ reserve requirements by 50bps. It’s called Cash Reserve Ratio and the RBI reduced it from 6.00% to 5.50% with effect from the following week. The Reserve Bank of India is one of the most backward central bank in liquidity management and sometimes panics and changes […]


The Eurosystem And Greek Government Debt

25 January 2012

Some bonds of the Greek government mature on March 20. The total principal amount is €14.5bn. The focus in the financial markets is what will happen to these securities and everyday we read about negotiations with the creditors on “private sector involvement (PSI)”. For the latest see this WSJ article Greece Private-Sector Creditors Meet in Paris. According […]


Some GIMP Fun With Spain’s Sectoral Balances

24 January 2012

… but not fun for the Spanish people. In yesterday’s post Spain’s Sectoral Balances, I briefly discussed the sectoral balances of Spain and its connection with demand, income and output. Here’s the original graph from the Banco de España again with my viewpoints in the previous post. I learned some GIMP from a friend some […]


Spain’s Sectoral Balances

23 January 2012

The Banco de España released its Quarterly Economic Bulletin today and it had an interesting chart on the sectoral balances of the Spanish economy. With a net indebtedness of €994.5bn – i.e., close to €1 trillion – as compared to the gross domestic product of €1.06tn (2010 figure) Spain has limited choices. Except via the possibility of expanding […]


By The Theory’s Originators, At Any Rate

21 January 2012

While most people – including most economists – treat money as a commodity, there are some who understand the endogeneity of money. However, there is a degree of endogeneity assigned to the nature of money with some thinking money was a commodity in some periods in history. So one sees claims that what is written […]


Bidding Behaviour In The Eurosystem’s December 3-Year LTRO

19 January 2012

On 28 December 2011, the Eurosystem conducted a large 3-year LTRO (Longer-Term Refinancing Operation) in which banks in the Euro Area bid about €489bn. I covered this in my post Today’s Eurosystem LTRO and I wrote that the LTRO was to help banks meet their funding needs and that they participated in it to roll over existing […]


James Tobin On Public Debt

18 January 2012

James Tobin was one of the greatest economists. He had stock-flow consistency, understood how the monetary and financial system worked and had great ideas on open economy macroeconomics. However, he struggled to express his ideas at a more formal level, especially since he used some neoclassical formalism. This post may be of interest to Neochartalists. […]


Post Keynesian Markup Pricing

17 January 2012

I was collecting some articles by Basil Moore and I found this table from an article In Praise Of Markets – Wage Imitation And Price Stability (unsure as to why the article is titled “praise of markets”). The article appeared in Challenge in 1982. Post Keynesians adopt Kaleckian theory of pricing. There are two sectors – fix price […]


S&P’s FAQs On EA Rating Actions

14 January 2012

S&P released another document yesterday in connection with the rating action of Eurozone governments yesterday which you can get via it’s Tweet: FAQ on factors behind S&P’s rating actions on Eurozone governments: ow.ly/d/sQc — Standard & Poor’s (@standardpoors) January 13, 2012 On the political agreements, the release says: We also believe that the agreement is […]