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What about a country that adopts a foreign currency? Part Two
By L. Randall Wray Yet another rescue plan for the EMU is making its way through central Europe—with the ECB acting as lender of last resort to Euro-banks. It is trying the tried-and-failed Fed method...
View ArticleUnemployment Insurance for the 21st Century: The Job Guarantee as an...
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. As I concluded in my previous blog post: Olly Olly Oxen Free: it is safe to come out of the dark. A sovereign...
View ArticleWhat is Modern Money Theory?
By L. Randall Wray Happy New Year to All. We are (I think) a bit over half-way through the Modern Money Primer. We should be able to finish it by sometime next summer. OK, you might be wondering: Isn’t...
View ArticleMonetary and Fiscal Policy for Sovereign Currencies
By L. Randall Wray This week we begin a new topic: functional finance. This will occupy us for the next several blog posts. Today we will lay out Abba Lerner’s approach to policy. In the 1940s, he came...
View ArticleMilton Friedman’s 1948 Functional Finance Proposal
By L. Randall Wray In the context of today’s conventional wisdom about the dangers of budget deficits, Lerner’s views (examined last week) appear somewhat radical. What is surprising is that they were...
View ArticleMilton Friedman, Functional Finance and the Government Budget Constraint
By L. Randall Wray Last week we examined Milton Friedman’s version of Functional Finance, which we found to be remarkably similar to Abba Lerner’s. If the economy is operating below full employment,...
View ArticleFunctional Finance and Exchange Rate Regimes: The Twin Deficits Debate
By L. Randall Wray In the previous weeks, we examined the functional finance approach of Abba Lerner. It is clear that Lerner was analysing the case of a country with a sovereign currency (or what many...
View ArticleThe Fetish for Liquidity (and Reform of the Financial System)
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. In his General Theory, J.M. Keynes argued that substandard growth, financial instability, and unemployment are...
View ArticleMMT for Austrians
By L. Randall Wray In the past couple of weeks we turned to the question what should government do, and last week we discussed the concept of the public purpose. Clearly, we want the economy to do a...
View ArticleAnecdotes of Mortgage Fraud
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog at the Roubini Global Economics Project. In the last couple of weeks I’ve been pushing foreclosure fraud. Well,...
View ArticleWhy Minsky Matters
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. My friend Steve Keen recently presented a “primer” on Hyman Minsky; you can read it here. In his piece, Steve...
View ArticleMore on why Minsky matters
By L. Randall Wray A version of this post first appeared at "Great Leap Forward”, my EconoMonitor blog. Summary: From the 1920s, a peculiarly American misunderstanding developed according to which the...
View ArticleWhat is this “Financial Instability Hypothesis” by Hyman Minsky really about?
By L. Randall Wray A version of this post first appeared at "Great Leap Forward”, my EconoMonitor blog. Since Paul Krugman kicked-off a heated discussion about Minsky’s views on banks, and because the...
View ArticleThe euro disaster is about more than just current account imbalances
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. Two weeks ago I cited Paul McCulley’s claim that MMT got it right. I followed that up last week with Brad...
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More on the euro disaster and current account imbalances
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. Last week we looked at the claim that MMT has ignored current account imbalances among EMU members. That...
View ArticleCorporatism and Fraud are Why We’re Screwed:
By L. Randall Wray A version of this post first appeared at "Great Leap Forward”, my EconoMonitor blog. As the Global Financial Crisis rumbles along in its fifth year, we read the latest revelations of...
View ArticleThe Trillion Dollar Coin is a duration trade
By L. Randall Wray The Platinum coin has been all over the blogosphere as well as the media. Some have been arguing it will cause hyperinflation. How can issuing a coin to be held at the Fed to allow...
View ArticleThe theory of social costs: Why markets cannot discipline financial institutions
By L. Randall Wray I recently came across a video of one of my talks on the Global Financial Crisis, or, Global Economic Crisis, that provides a clear antitdote to orthodox thinking. You can view it...
View ArticleBrad DeLong believes deficits matter in Modern Monetary Theory
By L. Randall Wray Finally, a prominent “mainstreamer” Keynesian gets MMT. Over the past couple of years, Paul Krugman has got close, but he keeps claiming that MMT believes “deficits don’t matter”. He...
View ArticleHyman Minsky’s Early Work on Banking and Endogenous Money
By L. Randall Wray Some quarter of a century ago I wrote a paper that presented Minsky’s approach to money, linking it to his Financial Instability Hypothesis. The paper was rejected by one of the...
View ArticleTime to Demand Transparency and Accountability of Our Public Stewards
More Secrets of the Temple by L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. Back in 1989 William Greider shined a little light on the Fed’s operations in his...
View ArticleThe Euro, Currency Sovereignty and Adopting a Foreign Currency
By L. Randall Wray A country might choose to use a foreign currency for domestic policy purposes. As mentioned in a previous blog post, even the US government accepted foreign currencies in payment up...
View ArticleBernanke’s 29 Trillion Dollar Fog of Deceit
By L. Randall Wray As I reported over at Great Leap Forward, a new study by two UMKC PhD students, Nicola Matthews and James Felkerson, provides the most comprehensive examination yet of the Fed’s...
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Government Spending with Self-Imposed Constraints
By L. Randall Wray In the Primer we discussed the general case of government spending, taxing, and bond sales. To briefly summarize, we saw that when a government spends, there is a simultaneous credit...
View ArticleIt is Krugman who has shined the headlights on the difference between a...
By L. Randall Wray This post first appeared at "Great Leap Forward”, my EconoMonitor blog. As Mae Moore says, “It’s a Funny World” (2002). Let’s try to make sense of two news reports. Help me if you...
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