james tobin

Central Bank Asset Purchases And Its Connection To Tobin’s Theory Of Asset Allocation

15 May 2013

Recently, Martin Feldstein wrote a WSJ article The Federal Reserve’s Policy Dead End with a subheading summary “Quantitative easing hasn’t led to faster growth. A better recovery depends on the White House and Congress”. This has led to various dubious debunking such as “Feldstein doesn’t understand how QE works”. In the following (although I am no fan [...]

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Nicholas Kaldor On Floating Exchange Rates

25 April 2013

Martin Wolf has a nice new column on imbalances creating troubles for the UK economy in the Financial Times: What a floating currency gives and what it does not. Why are current account deficits a haemorrhage in the flow of circular income? Weak external trade performance implies a drain in demand and hence pressure on the [...]

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Money And Shoes

17 October 2012

… Now let me give you a ridiculous example to make the point. Don’t take it too seriously. Suppose that some statistician observes that over a long period of time there is a high association, a very good fit, between gross national product and the sales of, let us say, shoes. And then suppose someone [...]

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Income = Expenditure!

9 October 2012

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 nothing [...]

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Jayati Ghosh On G20

15 June 2012

Triple Crisis has a Spotlight-G20 series and Jayati Ghosh has an article aimed at leaders of G-20 who meet next week in Mexico: Spotlight G-20, If Not Now, Then When She says: … the G20 appears to have lost its way. Its original intention – to provide a relatively speedy and workable arrangement for global [...]

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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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Balance Of Payments: Part 1

8 March 2012

This is the first part of a series of posts I intend to write on the “rest of the world” accounts in National Accounts. This blog is about looking at economies from the point of view of National Accounts, Cambridge Keynesianism and Horizontalism. While various descriptions of balance of payments exist, most of them simply [...]

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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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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. [...]

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Financial Crisis And Flow Of Funds

11 November 2011

Marc Lavoie forwarded me the European Central Bank’s Monthly Bulletin, October 2011 which has a section on TARGET2 and the European monetary system. I have had good discussions with him on emails to nail the TARGET2 operations so it is good to see the conclusions being verified in publications. I am waiting to write a long [...]

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