Monetary and fiscal policy frameworks for Australia part 1 John Haly In September 2022, the Reserve Bank of Australia was opened to public assessment. The…
The post Monetary and fiscal policy frameworks for Australia part 1 first appeared on Economic Reform Australia.Macroeconomics
A Bank for International Settlements study says 60+ trillion dollars of off-the-books currency swaps could be a profound, systematic risk. Robert Johnson joins Paul Jay on theAnalysis.news.
Transcript
Paul Jay
Hi, I’m Paul Jay. Welcome to theAnalysis.news. In a few seconds, I’ll be back with Rob Johnson to talk about a ticking time bomb in the global financial system. Be back in just a few seconds. Please don’t forget the donate button at the top of the website, and subscribe on YouTube. Most importantly, come to the website and get on our email list, and I’ll be back, as I said.
I hate to be the bearer of more bad news, but there’s a story that appeared in the Business Press but received almost no attention in mass media. I think capitalism is in chaos and is out of solutions. If the climate crisis wasn’t enough to convince you, here’s another example.
A critical reappraisal of the case in favor of monetary tightening pressed by inflation hawks is overdue.
This post presents an update of the economic forecasts generated by the Federal Reserve Bank of New York’s dynamic stochastic general equilibrium (DSGE) model. We describe very briefly our forecast and its change since September 2022.
The COVID-19 pandemic, geopolitical tensions, and distinct economic conditions bring challenges to economies worldwide. These key themes provided a backdrop for the fifth bi-annual Global Research Forum on International Macroeconomics and Finance, organized by the European Central Bank (ECB), the Federal Reserve Board, and Federal Reserve Bank of New York in New York in November. The papers and discussions framed important issues related to the global economy and financial markets, and explored the implications of policies that central banks and other official sector bodies take to address geopolitical developments and conditions affecting growth, inflation, and financial stability. A distinguished panel of experts shared diverse perspectives on the drivers of and prospects for inflation from a global perspective. In this post, we discuss highlights of the conference. The event page includes links to videos for each session.
An obituary for Axel Leijunhufvud (Sept 6, 1933 - May 5, 2022)
Axel Leijunhufvud’s sad passing on May 5th has rightly stimulated a round of tributes to a thinker of uncommon breadth. But there is perhaps reason to doubt how widely appreciated the diversity of his thinking really was. Leijunhufvud changed the colors of his economic reasoning in response to many strands of 20th-century discussion, repainting each one. He had an ample palette and his color mixes were always interesting – an artist of macroeconomics indeed. Never lacking confidence and blessed with understated charisma, he was a member of one of Sweden’s oldest aristocratic families. Lionhead is a literal translation of his surname. (Old Swedish noble names can be peculiar. For example, Oxstars and Swineheads still roam the land.)
Evidence-based answers to the main (policy) questions concerning the return of high inflation
A specter is haunting the US—the specter of stagflation
Financial Times’ Martin Wolf (2022) is the latest influential voice sounding the alarm bell on ‘the threat of stagflation’ and calling for the Fed to drastically raise interest rates to bring inflation down to its target level. Published on May 24, Wolf’s diagnosis of where the stagflation in the US economy is coming from reflects current establishment opinion: nominal demand, fuelled by over-expansionary fiscal and monetary policies during the COVID-19 crisis, is exceeding US supply. To bring down inflation, these macroeconomic policy errors need to be corrected convincingly and as soon as possible. This is how Wolf puts it:
Are there alternative, less socially costly, ways to bring inflation down?
James K. Galbraith responds on the U.S. dollar system
I thank Philos Lysandrou and Anastasia Nesvetailova for their response to my essay on the dollar in a multi-polar world. Our conclusions are broadly similar, though a reader of the Lysandrou/Nesvetailova essay alone might be forgiven for thinking that sharp differences exist.
For instance, L/N characterize my view in these words: “He sees the confidence in the dollar as something highly fragile because it apparently lacks any material substance to back it.” I searched my text for the words “fragile” and “fragility.” They were not to be found. On the contrary, L/N quote the following passage but omit both a crucial intermediate sentence and also the conclusion, which are included in bold below:
The depth of the U.S. securities market helps ensure dollar hegemony
1. The Ukraine Crisis and Dollar Supremacy
Since the collapse of communism in the early 1990s and the subsequent rise of the world economy as a single market-based operational totality, its monetary counterpart has been a unipolar currency system centered on the US dollar as the premier vehicle currency in the private sector, as well as the premier reserve currency in the official sector. The hegemony of the dollar has survived several global economic shocks, including that of the financial crisis of 2007-9. Whether the system can survive the seismic shocks stemming from Russia’s invasion of Ukraine in February 2022 is now under active debate.