Respect For Identities

27 March 2015

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? … Identities say […]

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Thomas Palley — More Jobs, Still Weak Wage Growth: The Federal Reserve Must Wait

11 March 2015

Thomas Palley has a new op-ed titled More Jobs, Still Weak Wage Growth: The Federal Reserve Must Wait on the AFL-CIO page (here) and on his own web page (here). … The [February employment] report is another in a string of strong employment reports, but it also contains depressingly familiar news about weak wage growth and […]

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Thomas Palley — The U.S. Federal Reserve And Shared Prosperity

25 February 2015

Thomas Palley has a new Op-Ed for The Globalist titled The U.S. Federal Reserve and Shared Prosperity in which he argues against ““pre-emptive inflation tightening” that sacrifices wage growth and full employment versus “testing the waters” that gives wage growth and full employment a chance.” He asks the Fed to abandon its 2% inflation target with many compelling […]

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Derailed: Wynne Godley On The Euro Area

20 February 2015

I am in favour of Britain having much closer ties with other European countries, provided that appropriate institutions are created and the whole thing is brought under effective political control. But I have never been able to understand what it is that those who support the Maastricht Treaty think they are going to get out […]

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Anthony Thirlwall’s New Book On Keynesian And Kaldorian Economics

28 January 2015

During the global economic and financial crisis Keynes became popular again but Nicholas Kaldor’s ideas and the mention of the man himself didn’t take off as much. It’s unfortunate, as Kaldor played a huge role in the development of Keynesian economics itself. Kaldor’s own ideas are a subject of its own. Anthony Thirlwall is releasing […]

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JKH On Paul De Grauwe’s Fiscal Arithmetic

21 January 2015

In a recent article for VOX, Paul De Grauwe and Yuemei Ji write about potential fiscal effects of a possible asset purchase program by the Eurosystem (European Central Bank and the National Central Banks in the Euro Area). In that the authors take an extreme stand suggesting that a default by a Euro Area government […]

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The Devil Is In The Detail

15 January 2015

There are two ways in which the terminology “net lending” is used. In national accounts, it is the difference between saving and investment for any economic unit or a sector. “S − I”. It is the financial surplus. Bankers and central bankers use “net lending” a bit differently. Here there is “netting” when redemptions are netted.  For example, suppose […]

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New Book: The Encylopedia Of Central Banking

10 January 2015

Via ROKE’s Facebook page: Post by Review of Keynesian Economics. (I have two articles on this: Open Mouth Operations and Reflux Mechanism, the latter co-authored with Louis-Philippe Rochon.)

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Keynesian Economics And Thievery

23 December 2014

In a WSJ opinion piece titled An Autopsy for the Keynesians, John H. Cochrane makes the following accusation on Keynesian Economics: By Keynesian logic, fraud is good; thieves have notoriously high marginal propensities to consume. Cochrane’s piece reads as assertions after assertions trying to prove that fiscal policy is impotent. Keynesians emphasize the role of effective demand […]

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Sergio Cesaratto’s Debate With Marc Lavoie On Whether The Euro Area Crisis Is A Balance-Of-Payments Crisis

22 December 2014

Sergio Cesaratto has a new paper Balance Of Payments Or Monetary Sovereignty? In Search Of The EMU’s Original Sin – A Reply To Lavoie. (html link, pdf link) I obviously agree with Sergio Cesaratto. As long as there is no supranational fiscal authority, a Euro Area nation’s economic success is more restricted by its exports than otherwise […]

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