May 2012

Recommended Readings

28 May 2012

The crisis has a lot of connections with the way Macroeconomics was done in the 1970s and this interests me a lot. Of course the equally important reason was that Nicholas Kaldor and Wynne Godley were highly involved in the public discussions. Here are some books I collected which have special importance to the Cambridge [...]

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Mosler And His Moslerisms

22 May 2012

A few readers/commenters of my blog brought attention to a video of Warren Mosler where he claims that “there is no such thing as a capital flight” – presumably for a nation with a “sovereign currency” with the implication that a Euro Area nations can simply leave the Euro and adopt their original currency without [...]

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Balance Of Payments: Part 2 – Double Versus Quadruple Entry Bookkeeping

20 May 2012

Some time back I had started with the first part of a series of posts on this topic: see Balance Of Payments: Part 1. From the same post, here’s from the Australian Bureau of Statistics’ manual Balance of Payments and International Investment Position, Australia, Concepts, Sources and Methods, 1998 (click to enlarge) So we have the current account, the [...]

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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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