horizontalism

Kaldor’s Reflux Mechanism

12 April 2012

The recent debates of Post Keynesians with Neoclassical/New Keynesians has highlighted that the latter group continues to hold Monetarists’ intuitions. Somehow the exogeneity of money is difficult for them to get rid of, in spite of their statements and rhetoric that money is endogenous in their models. So there is an excess of money in [...]

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Open Mouth Operations

5 April 2012

In the previous post Is Paul Krugman A Verticalist?, I discussed the confusions economists and market commentators have on open market operations. Even top economists such as Krugman suffer from confusions on central banking and monetary matters. I also mentioned the work of Alfred Eichner on bringing out more clarity on the defensive nature of [...]

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Is Paul Krugman A Verticalist?

31 March 2012

24 years back, Basil Moore wrote a book Horizontalists And Verticalists: The Macroeconomics Of Credit Money (Cambridge University Press, 1988) which begins like this: The central message of this book is that members of the economics profession, all the way from professors to students, are currently operating with a basically incorrect paradigm of the way modern [...]

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Income And Expenditure Flows And Financing Flows

13 February 2012

In the previous two posts, I went into a description of the transactions flow matrix and the balance sheet matrix as tools for an analytic study of a dynamical study of an economy. During an accounting period, sectors in an economy are making all kinds of transactions. These can be divided into two kinds: Income [...]

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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 [...]

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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 [...]

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Alfred Eichner And Federal Reserve Operating Procedures

1 January 2012

Alfred Eichner was a Post-Keynesian economist known for his text Macrodynamics of Advanced Market Economies published 3 years after his death in 1988. He died at the age of 50 in an accident and at the time he was preparing to include an analysis of open economy macroeconomics in his story of how economies work. [...]

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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 [...]

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Horizontalism

5 August 2011

The central message of this book is that members of the economics profession, all the way from professors to students, are currently operating with a basically incorrect paradigm of the way modern banking systems operate and of the causal connection between wages, prices, on the one hand, and monetary developments, on the other. Currently, the [...]

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