Macroeconomics

What Strategies can Break This Dependency?

The dollar system has proven resilient in the face of recent extreme and unexpected shocks, but it has also failed to foster sustainable growth and prosperity. Can it survive its contradictions? Evidence from the latest Trade and Development Report of UNCTAD suggests better South-South and commodity producers-consumers agreements are needed, on the way to a more inclusive international monetary system.

In a climate of fiscal austerity, unconventional monetary policy has been at the forefront of macroeconomic stabilization efforts since 2008, with the beginning of the Federal Reserve’s quantitative easing (QE) programs. At the time, when the fiscal channel dried up (after a short-lived stimulus) but growth and inflation remained low, developed countries relied on large purchases of bonds and other securities by their central monetary authorities to support long-term credit creation while maintaining the smooth functioning of the money markets.

A Novel Account of Inflation Forecasts

The use and abuse of MMT (Part 1) Michael Hudson, Dirk Bezemer, Steve Keen and Sabri Öncü Summary After being attacked by monetarists and others…

The post The use and abuse of MMT (Part 1) first appeared on Economic Reform Australia.

The payments system is merely a technical and bookkeeping question, mundane in the end. The idea of operating it with only reserves puts in stark relief a far more important question: What is the point of banks at all?

This sixteen-part series, The Souls of the People, will explore these issues and the ideas and economics behind them. The values, origins, economics and philosophy behind the call to "cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub" (Norquist). The creation of think tanks specifically to provide a pseudo-intellectual foundation for inequality, and that along with media convince the middle class to vote against their own interests. The rise, reasons for, and effect of beliefs that markets without law allow for full employment and that wage laws cause unemployment. That competition alone can bring about good working conditions. The rejection of progressive taxes, and of the right to avail ourselves of the power and resources of the country through organizing public goods. And most importantly, how all of these are maintained by laws that impoverish the powerless and enrich the powerful, and thus are self-perpetuating.

These issues are yet again the problem of our age. Their seeming trajectory towards resolution post WWII, with widespread prosperity and a rising middle class, has been undone. What undid them points to the underlying problem: Immediate causes include the spectacular increase in financialization and unearned rents, the lack of and lack of enforcement of progressive taxes, both in turn largely due to a shift in the public's understanding of these issues. What caused this shift in public understanding is the age old problem—power and the lack thereof.

The sentence in Ben Shapiro's book preceding the title quote is this: "Discussions of income inequality, after all, aren't about prosperity but about petty spite." I'm sorry Mr. Shapiro, but this is entirely about prosperity. And not at all petty.

An important area of concern among many cryptocurrency proponents revolves around the idea that the current banking and government finance systems are inherently unstable or inflationary. Ultimately all finance is about debits and credits, assets and liabilities. How would total adoption of crypto by a country change these?

The currency of international trade has been on a lot of peoples' minds in the last few years. The hierarchy of currencies literature, the related questions of reforming the international monetary and financial system (IMFS), the effects of US monetary policy on the rest of the world (ROW). Add to that the war in Ukraine and Chinese trade-related discussion on the role of the ruble, dollar, yuan, oil and natural gas, wheat etc.

It is important to note that the proposals for a supranational currency have been made with various, disparate goals. Some are primarily interested in some aspect of commodities, others primarily or completely the supranational-currency aspect. These can overlap in several ways. The primary possibilities: