Modern Monetary Theory

Last summer I wrote a post clarifying some points that I have learned about Modern Monetary Theory. The genesis of the post was a gross mischaracterization of Modern Money Theory (MMT) by Paul Krugman in a piece called “I Would Do Anything…

There is, and historically has been, some confusion surrounding sovereign currency. So, many policy makers and economists have had trouble understanding why the private sector would accept currency issued by government as it makes…

I do not take the position that other writers on this blog do that Social Security and Medicare must be protected at all costs. In fact, as you can see above, I outlined very clearly two years ago what is happening politically right now.…

This post explains both the wellspring and the significance of currency sovereignty, something that Eurozone countries gave up to join the single currency.

Randall Wray takes a bearish view of the Greek situation, the capital position of European banks and the future of the Euro.

Randall Wray revisits the Clintonian Goldilocks economy to find the seeds of the Global Financial Crisis, using the sectoral balance approach.

If the public sector balance must over time move from around -10 percent to around -3 percent to stabilize the federal debt-to-GDP ratio at tolerable levels, then the private sector balance and the current account balance must move by…

I ran across a post by Robert Murphy over at the Mises Institute blog on Modern Monetary Theory. Since I have been pushing the idea that the centrality of secular debt accumulation makes some ideas from MMT and Austrian Economics…

QE is, in fact, a ‘crop failure’ for the dollar. The Fed’s shifting of securities out of the economy and replacing them with clearing balances removes interest income. And the lower rates from Fed policy also reduces interest paid to the…

Below is a framework that delineates the ideology and economics of two groups of economic thought that are much talked about in the wake of the Credit Crisis: the Chartalists and the Austrians. These two groups are considered outside of the…