neochartalism

Fake Trade-Offs

13 February 2013

Elasticities for one last time for now. Recently Tom Palley wrote a fine critique of the Neochartalist approach to solve the world problems with oversimplistic solutions. Among other things, Palley challenges the simplistic Chartalist solutions due to dilemmas posed by the external sector. Bill Mitchell of Australia wrote a reply in which he states the [...]

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Wynne Godley And The Dynamics Of Deficits And Debts

5 January 2013

In a five-part series in his blog, Functional Finance and the Debt Ratio Scott Fullwiler claims that if the interest rate is held below the growth rate of output, sustainability of the public debt/gdp ratio is guaranteed in the sense that the ratio converges and does not keep increasing forever. This is erroneous and his conclusions are [...]

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Not A Balance-Of-Payments Crisis?

27 October 2012

Here’s a new piece by Randall Wray on Economonitor claiming current accounts do not matter (once again!) and didn’t have much of a role on the Euro Area crisis. Part of his arguments are the same as those who participated in public debates 1991 (most, not all) and claimed the balance-of-payments doesn’t matter. Perhaps he should [...]

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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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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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Saving Versus Saving Net Of Investment

20 March 2012

The commenter JKH has an outstanding post here at Cullen Roche’s blog criticizing the Neochartalists’ mixing up of saving and saving net of investment. JKH quoting Randy Wray: Then, this is telling: “To briefly summarize, at NEP we prefer to use the Godley sectoral balance approach, where he defined private sector saving as “net accumulation of financial assets” [...]

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