Modern Monetary Theory

by L. Randall Wray In recent weeks, the explanation for the financial and economic crisis that has gripped the world economy has shifted sharply from deregulation and lack of governmental oversight of financial institutions to fraud and…

Given the push toward austerity, I want to make a few remarks about the intersection of full employment with trade and exchange rates. It all begins with the British austerity budget. In regards to that budget, recently presented by the…

The short answer to my question is no. I was thinking about this early today and here's what I have come up with as a more fleshed out answer. Budget deficits are the result of an ex-post accounting identity. In plain English this means…

In regards to Ed's last post on China and trade, the position of Michael Pettis is much closer to mine (and Martin Wolf's, which he expressed yesterday in the FT).  The quote of Pettis that Ed cites does not invalidate my position at…

Here we go again: the dollar appears to be under sustained attack in the foreign exchange market. To judge from its latest FOMC statement, the Federal Reserve appears to be actively encouraging inflation: “The Committee will continue to…

There has been a lot of speculation about what the Federal Reserve will or will not do regarding quantitative easing (QE) in order to boost the economy. With the Obama administration constrained regarding fiscal policy, attention has turned…

When people talk about the recent sovereign debt crisis they make a lot of sweeping statements about debt and currency which allow them to make false analogies. This does us all a disservice because it creates a false impression about the…

“I am deeply ashamed to know that I won't be able to pay our staff. They have got mortgages, children. What am I supposed to do?" Jesus Manuel Ampero, Mayor of Cenicientos (Spain) It has been an unpredictable summer. Investors…

How does the government pay for stuff? That's a question we should all be asking ourselves. I'm speaking here both from a philosophical and functional perspective. You and I have to earn our money by working. Usually we deposit this money…

Marshall Auerback here. Our Treasury Secretary has conceded that it is still a “tough economy” for most Americans, and warned it’s possible the unemployment rate will go up for a couple of months before it comes down. Given the…