Author

Randall Wray 74 posts 0 comments

L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City. His current research focuses on providing a critique of orthodox monetary policy, and the development of an alternative approach. He also publishes extensively in the areas of full employment policy and the monetary theory of production. Wray received a B.A. from the University of the Pacific and an M.A. and a Ph.D. from Washington University, where he was a student of Hyman Minsky.

Monetary System

Reserves, Governement Bond Sales, and Savings

Randall Wray Oct 31, 2011

Last week we showed that government deficits lead to an equivalent amount of nongovernment savings. The nongovernment savings created will be held in claims on government. Normally, the nongovernment sector prefers to hold that much of that…

Monetary System

The two-step process of saving

Randall Wray Oct 24, 2011

Recipients of government spending can hold receipts in the form of a bank deposit, can withdraw cash, or can use the deposit to spend on goods, services, or assets. In the first case, no further portfolio effects occur. In the second case,…

Monetary System

Effects of Sovereign Government Budget Deficits on Saving, Reserves and Interest Rates

Randall Wray Oct 17, 2011

Each time the treasury spends or taxes, a complex series of steps is required that involve the treasury, the central bank and private banks. The central bank and the treasury develop such procedures to ensure that government is able to…

Monetary System

Currency Sovereignty

Randall Wray Oct 3, 2011

This week we will begin to examine our next topic: government spending, taxing, interest rate setting, and bond issue. We will examine fiscal and monetary policy formation by a government that issues its own currency. We will bear in mind…

Markets

The Biggest Bubble of All Time

Randall Wray Sep 22, 2011

What is surprising is that over the past decade, the price rises you find for 33 commodities are just about beyond the realm of possibility—2, 3, and 4 standard deviations away from trend. It is a boom without any precedent. Quite simply,…

Monetary System

The Unusual Case of Euroland

Randall Wray Sep 19, 2011

In the next series of blog posts, we will look in more detail at fiscal and monetary operations of a nation with a sovereign currency. Before we do that, let us briefly examine the case of the Euro. Let me say that we will not address the…

Economy

The Pyramid of Liabilities

Randall Wray Sep 12, 2011

Leverage is the practice of holding a small amount of government currency in reserve against IOUs denominated in the state’s unit of account while promising to convert those IOUs to currency. This can lead to a “run” on private IOUs,…

Monetary System

The prospects for inflation have not been smaller since 1930

Randall Wray Sep 7, 2011

Just where are all those borrowers who are willing and able to borrow the $2 trillion or $20 trillion that hyperventilators believe banks want to lend? The US private sector (firms and households) have instead ramped up their net…

Monetary System

IOUs Denominated in National Currency

Randall Wray Sep 5, 2011

On a floating exchange rate, the government’s own IOUs—currency—are nonconvertible in the sense that the government makes no promise to convert them to precious metal, to foreign currency, or to anything else. Instead, it promises only to…

Monetary System

Commodity Money Coins: Metalism versus Nominalism, Part Two

Randall Wray Aug 29, 2011

This week we examine coinage from Roman times to the present in Western society.