Category Economics

Modern Monetary Theory (MMT) is sometimes perceived as left wing or, in some way, specifically suited to the left. MMT in itself, however, is neither left nor right wing. It is basically silent on political matters. The only sense in…

Scott Fullwiler discusses, in a recent paper, the distinction in Modern Monetary Theory (MMT) between the ‘general’ and ‘specific’ cases. Analysis of the general case concerns a sovereign currency issuer prior to the imposition of any self-imposed constraints. Analysis of…

In my previous post, it was mentioned in passing that although Kalecki agreed with a “solid majority” of economists that, economically, full employment could be maintained through a government spending program, he argued in his famous 1943 essay, Political Aspects…

I am interested in how Modern Monetary Theory (MMT) relates to other macroeconomic approaches. There are strong connections to chartalism and credit theories of money (Knapp and Mitchell-Innes); Keynes and the principle of effective demand; Lerner’s functional finance; Minsky’s analysis…

In Modern Monetary Theory (MMT), a distinction is made between ‘vertical’ and ‘horizontal’ transactions. The former refer to transactions between government and non-government; the latter to transactions within non-government. I thought it might be helpful to clarify the significance of…

Taking the role of effective demand seriously can sometimes seem to put you between a rock and a hard place in relation to other economists. Here, I want to consider the significance of demand in general, its connections to profitability,…

Yesterday (here) I linked to a post by Matias Vernengo on Keynes’ theoretical contribution in light of the capital debates. I thought it might be worthwhile to elaborate on a central aspect of Vernengo’s post, particularly as it concerns the…

In previous posts, I have made frequent reference to the Cambridge Capital Controversy and its significance for macroeconomic debates. Robert Vienneau, who often writes on issues relating to this controversy, draws attention (here) to a recent post by Matias Vernengo…

The impetus for this post is a short video in which Amy Goodman interviews David Graeber, one of the organizers of the Occupy Wall Street movement. Hat tip to Tom Hickey at Mike Norman Economics for the link. The interview…

Macroeconomists often start their analysis from an accounting identity or set of identities. Since identities are true by definition, they can provide a good framework for analysis, including a way to detect any errors in logic or inconsistent conclusions. A…