Monday, March 18, 2024

Claims that mainstream economics is changing radically are far-fetched — Bill Mitchell

I have received several E-mails over the last few weeks that suggest that the economics discipline is finally changing course to redress the major flaws in the curricula that is taught around the world and that perhaps Modern Monetary Theory (MMT) can take some credit for some of that. There has been a tendency for some time for those who are attracted to MMT to become somewhat celebratory, even to the point of declaring ‘victory’. This tendency is not limited to the MMT public who comment on social media and the like. My response is that we are probably further away from seeing fundamental change in the economics profession than perhaps where we were some years ago – after the GFC and in the early years of the pandemic (which continues). My answer reflects the incontestable fact that the make up of faculties within our higher education systems has not changed much, if at all, and the dominant publishing and grant awarding bodies still reflect that mainstream dominance. There is still a lot of work to be done and a lot of ‘funerals’ to attend (à la Max Planck)....

Summary: Nothing is going to change while the same clique remains in power and controls the educational and publishing process. Same in politics, although it is much more difficult to control the narrative that serves as an instrument of control than the narrative in terms of which the public understands economics. Heterodox economics has a long way to go in disrupting and eventually replacing this "Econ 101" narrative that firmly rules the collective mindset.

There is much more in this post than the title and lede paragraph would suggest.

Here is an example.

[Angus] Deaton then admits that “I have recently found myself changing my mind, a discomfiting process for someone who has been a practicing economist for more than half a century.”

How so?

Well,

1. He now says that the dominance of the “virtues of free, competitive markets” has meant that mainstream economics has ignored corporate power.

He wrote: “Without an analysis of power, it is hard to understand inequality or much else in modern capitalism.

That is, without beginning with class conflict, an analyst has zero chance of gaining an understanding of the dynamics of capitalism, where capital seeks to influence outcomes in any way that advances their cause to retain their hegemony.

But if we introduced that into economic analysis there would be no mainstream elements worth retaining.

The dominance unit of analysis in mainstream economics is the individual.

Society is not considered.

Collectives are not considered.

Conflict is played down.

And when power does come up in mainstream economics the focus has been of trade unions as perverting the free workings of the labour contracting process. 

It continues.

This inquiry requires distinguishing two kinds of approach to economics.

1. One based on a "for-profit model" which assumes that a "free market" maximizes efficiency so that everyone gets more of a growing pie, which increasing inequality belies.
2.  The other based on a "fo- purpose model" that is designed and operated as the life-support system of a society. 

The former is a purely economic model while the latter is a socio-economic model that incorporates everything relevant, considering not only economics but also economic sociology and anthropology, economic geography, and comprehensive history, as well as psychology and evolutionary theory. Moreover, the scope of economics in a for-purpose model needs to include so-called heterodox approaches to economics in addition to the now dominant conventional model on which neoliberalism is based and which delivers ongoing control to the wealthy and powerful, creating plutocratic oligarchy in the place of actual democracy and government of the people for the people and by the people.

William Mitchell — Modern Monetary Theory
Claims that mainstream economics is changing radically are far-fetched
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Friday, March 15, 2024

Will BRICS launch a new world in 2024? — Pepe Escobar

BRICS doubled its membership at the start of 2024, and faces huge tasks ahead: integrating its newest members, developing future admission criteria, deepening the institution's groundings, and most importantly, launching the mechanisms for bypassing the US dollar in international finance.

The financial plans are toward the end of the post. No details yet, but a plan is supposed to be presented at the BRICs meaning in the fall of this year. An alternative BRICs currency is not being planned at this stage when BRICs is just getting off the ground and has yet to be adequately institutionalized yet itself. It still just "a club" at this point. Lots of work to be done, especially with many more countries already lining up for membership.

The Cradle

Joe Stiglitz really should not talk about modern monetary theory when he so obviously has no clue about what it actually says — Richard Murphy

Joseph Stiglitz makes freshman mistakes about MMT in addressing the House of Lords Economic Affairs Committee on the sustainability of the UK’s national debt. Richard Murphy calls him out on it.


Funding the Future (formerly Tax Research UK)
Joe Stiglitz really should not talk about modern monetary theory when he so obviously has no clue about what it actually says
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

Thursday, March 14, 2024

Keynes was wrong because he failed to consider class conflict — Bill Mitchell

 Important for MMT aficionado's. 

I was asked during an interview the other day from Paris whether I was a Post Keynesian. I replied not at all and explained that I have never felt that my ideas fit into that category although in a facile sense we are all post keynesian in a temporal sense. Most progressive economists would answer yes if confronted with that question, even most of the economists involved in advancing Modern Monetary Theory (MMT). My point of departure is that while there was a lot of important analytical material in Keynes’ writing that is worth preserving and integrating into, say, MMT, where Keynes went astray was his antipathy to the insights provided by Karl Marx. In particular, I consider that Keynes seriously misunderstood what the dynamics of the class conflict were within a capitalist mode of production. Keynes made major errors in his predictions that one can directly attribute to this blinkered approach to capitalism. I was reminded of this when I read an Op Ed in the Japan Times this week (March 10, 2024) – The economic future of our overworked grandchildren. This blinkered approach, which has fed into the modern Post Keynesian literature – which examines capitalism as if it is an ahistorical, neutral system of production and distribution – is a major reason that I do not associate my work with that school of thought.

Failing to note the economic importance of class and class conflict  is a foundational error. 

"Class struggle" is foundational for Marx. Keynes knew this, of course. R. H. Tawney's Religion and the Rise of Capitalism was published in 1926. Keynes would have been aware of Weber and Tawney as well as Marx, all of whom viewed economic systems as historically determined socio-economic artifacts rather than natural systems. Keynes acknowledge this in calling economics a "moral science," which was also Adam Smith's view. The big three — Smith, Marx, and Keynes — were on the same page here.

Class is something that Keynes could not have missed being a member of the British upper class in a highly class-ridden society. Not only that the rise of Marxism in Russia and it's challenge to the West by socialists and communists in in the West had a particular salience at the time that Keynes was writing.

Did he miss the importance of class conflict to economics, or was he intentionally countering Marx in the West as the time that socialism was rising as an option to capitalism ("bourgeois liberalism").

In other words, was Keynes at apologist for capitalism that tried to put a better face on a fundamentally flawed socio-economic system by tweaking it. 

Where Keynes came down on this is still debated, and there is wide disagreement about what role Keynes played and how he actually viewed it himself.

On the other hand, Keynes also was working in what he terms the "classical" paradigm prevalent at the time, which is now called "neoclassical." As Bill says, Keynes's "blinkered approach ... examines capitalism as if it is an ahistorical, neutral system of production and distribution."

Keynes seems to have had a foot in two boats. Bill claims that this results in major issues.

How does Bill's position affect MMT, as he admits that he difference from some other MMT economists on such issues.

William Mitchell — Modern Monetary Theory
Keynes was wrong because he failed to consider class conflict
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Disclaimer

 

LOL… Need a similar disclaimer when reporting on the debt doomsday morons who have been continuously wrong for 40 YEARS…




Wednesday, March 13, 2024

EU: Austerity for the people and Keynesianism for the war — Riccardo Zolea

MMT-related.

Monetary Policy Institute
EU: Austerity for the people and Keynesianism for the war
Riccardo Zolea, Sapienza University of Rome

Global South Repositioning — Fadhel Kaboub

Not MMT per se, but a post on recent doings in the real world by an MMT economist of rising prominence in the Global South. This post is broadly about a strategy for decolonization and leveling the playing field.

Global South Perspectives—Reflections & Analysis by Fadhel Kaboub
Global South Repositioning
Fadhel Kaboub, Associate Professor of economics at Denison University (on leave) and President of the Global Institute for Sustainable Prosperity. He currently serves as the Under-Secretary-General for Financing for Development at the Organisation of Educational Cooperation in Addis Ababa, Ethiopia.He also held a number of research affiliations with the Levy Economics Institute, the John F. Kennedy School of Government at Harvard University, the Economic Research Forum (Cairo), Power Shift Africa (Nairobi), and the Center for Strategic Studies on the Maghreb (Tunis). Fadhel is Tunisian-American MMT economist. Ph.D. in Economics & Social Science Consortium, 2006, University of Missouri - Kansas City. M.A. in Economics, May 2001, University of Missouri - Kansas City. B.S. in Economics, June 1999, with Distinction

Tuesday, March 12, 2024

How Sustainable is our National Debt? — NeilW

The UK House of Lords Economic Affairs Committee is running an inquiry entitled “How sustainable is our National Debt?”

The GIMMS written evidence to the inquiry has now been published....
New Wayland
How Sustainable is our National Debt?
NeilW

Monday, March 11, 2024

The Trouble with Words — Peter Radford

The title of the post should be "The Trouble with Economics." Words. The point is well-taken.

The Radford Free Press
The Trouble with Words
Peter Radford

Friday, March 8, 2024

Why and how economics must change — Jayati Ghosh

While this post is not MMT, it is consistent with MMT and implies that MMT is needed to address the issues that stem from wrong assumptions about the relationship of economics, finance, money and banking, as well as the mistaken view that money is neutral, being only a veil over what is at bottom a barter economy under the veneer of a monetary economy.

While MMT doesn't deal directly with the relationship of economics and power, being an institutional approach is incorporates the role of power implicitly in its analysis of the the relationship of economics and finance. 

Much of what is presented as received economic wisdom about how economies work and the implications of policies is at best misleading and at worst simply wrong. For decades now, a significant and powerful lobby within the discipline has peddled half-truths and even falsehoods on many critical issues for example, how financial markets work and whether they can be “efficient” without regulation; the macroeconomic and distributive implications of fiscal policies; the impact of labor market and wage deregulation on employment and unemployment; how patterns of international trade and investment affect livelihoods and the possibility of economic diversification; how private investment responds to policy incentives such as tax breaks and subsidies and to fiscal deficits; how multinational investment and global value chains affect producers and consumers; the ecological damage wrought by patterns of production and consumption; whether tighter intellectual property rights are really necessary to promote invention and innovation; and so on.

Why does this happen? The original sin could be the exclusion of the concept of power from the discourse, which effectively reinforces existing power structures and imbalances. Underlying conditions are swept aside or covered up, such as the greater power of capital compared with workers; unsustainable exploitation of nature; differential treatment of workers through social labor market segmentation; the private abuse of market power and rent-seeking behavior; the use of political power to push private economic interests within and between nations; and the distributive impacts of fiscal ani.e. monetary policies.
The influence of power on economics and finance has been institutionalized legally in spite of blatant conflicts of interest and double standards.

The relationship of economics and power is studied specifically by economic sociology. For example, neoliberalism is a political theory based on economic liberalism. For example, state capture results from economic liberalism in a democracy through the influence of the donor class on institutions and policy. This also results in the capture of academia, resulting in "orthodox" quasi-religious doctrine.  

Real-World Economics Review Blog
Why and how economics must change
Jayati Ghosh | Professor of Economics at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, in New Delhi

Thursday, March 7, 2024

America Enters the Samizdat Era — Matt Taibbi

The bloodiest period of Soviet totalitarianism ended in the fifties, but the habits remained long after, including the advanced system of alternative media that ultimately broke the state: samizdat.

Tonight, along with Stanford’s Dr. Jay Bhattacharya and New York Post reporter Miranda Devine, I’ll be accepting the inaugural Samizdat Prize, given by the RealClear Media Fund. Samizdat is a bit of a play on words, since like a lot of politically oppressive groups the Soviets had a mania for reducing beautiful language to state-acceptable ugly compound words (GosPlan, GULAG, etc.), so in place of GosIzdat (State-Publish, the official publisher) dissidents created Sam- or “Self” Izdat: “Self-Publish.”

Ten years ago PBS did a feature that quoted a Russian radio personality calling Samizdat the “precursor to the Internet.” Sadly this is no longer accurate….
On the emergence of gatekeepers.

Racket News
Matt Taibbi

"The Debt Crisis Is Here": The Conference Board Is At It Again — Brian Romanchuk

The Committee for Economic Development (CED) of Conference Board recently put out “Explainer: The National Debt” which is pretty much a greatest hits of debt scare mongering. Other than the references to recent events and data, it is timeless: the authors could have put out the same report in any year since the mid-1980s and not much of the contents would have changed. Anyone who thinks that the MMT debate would improve things just needs to read the report to see that progress in conventional economics is largely illusionary.….

Pavlina Tcherneva – Whatever it Takes: How Neoliberalism Hijacked the Public Purse — Pavlina R. Tcherneva

The spectacular government spending post-2008 and post-2020 appeared to upend the neoliberal logic of the past decades, enabling bold public action and opening the door to a more just and democratic social order. Specific policy choices stamped out this opportunity. These pivotal moments did, however, point to policy levers that can facilitate a breakthrough....
Brave New Europe
Pavlina Tcherneva – Whatever it Takes: How Neoliberalism Hijacked the Public Purse
Pavlina Tcherneva | Founding Director of OSUN-EDI, Professor of Economics at Bard College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability

MMT sees America through rapid economic recovery — Stephanie Kelton

Modern monetary theory has been influential in helping America rise out of the recession that crippled the economy during the pandemic, writes Professor Stephanie Kelton and Dr Steven Hail.

The overwhelming number of articles appearing attack MMT pretty much as the work of the devil.  Regarding the the quote, "first they ignore you, then they laugh at you, then they fight you, then you win" (misattributed to Mahatma Gandhi), we seem to be at the attack stage. 

Independent Australia
MMT sees America through rapid economic recoveryStephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders

Tuesday, March 5, 2024

After Nigeria’s eNaira Disaster, Another “Live” Central Bank Digital Currency, Jamaica’s Jam-Dex, Founders — Nick Corbishley

Just three countries have so far introduced CBDCs, according to the IMF, and two of them are already having serious issues.

The roll-out of central bank digital currencies (CBDCs), while still in its early stages, is not going as smoothly as the central banking community may have hoped. The latest central bank to admit to serious difficulties is the Bank of Jamaica (BOJ) whose governor Richard Byles has acknowledged that the rollout of the country’s CBDC, the Jam-Dex, has been a lot slower than originally anticipated. In fact, the total amount of Jam-Dex in circulation has remained stuck at just 230 million Jamaican dollars (USD 1.47 million) since the first — and so far only — batch of the digital currency was “minted” 19 months ago.

The Jam-Dex is one of just three fully-launched retail CBDCs in the world, according to the IMF, alongside the Bahamian sand dollar and Nigeria’s eNaira.

“Being one of the first in the world has its unique challenges,” Byles said at the BOJ’s quarterly monetary policy report press conference last Wednesday. “What we are finding in the roll-out is that as we address an issue and move ahead, another one pops up. I guess that’s what you get for being amongst the first; you don’t have a road map set out by others, but we are determined.”...
Naked Capitalism
After Nigeria’s eNaira Disaster, Another “Live” Central Bank Digital Currency, Jamaica’s Jam-Dex, Founders
Nick Corbishley

Google Demands That We Censor Our Content — Yves Smith

FYI. The information space is narrowing.

Naked Capitalism
Google Demands That We Censor Our Content
Yves Smith

Voters Say Biden Will Make Inflation Worse

 Biden still has a big “inflation!” political problem…. Story at National Pulse:

As the U.S. economy braces itself for the third year of an inflation surge that has substantially hiked the cost of living and sharply depressed real wages, most registered voters believe President Biden’s policies will cause prices to rise.   

A poll by CBS News and YouGov released Sunday shows that 55 percent of registered voters believe Biden’s policies will trigger price increases. 

Only 17 percent of registered voters believe his policies will cause prices to decline. 

Twenty-seven percent believe his policies won’t impact prices either way, suggesting that 82 percent of voters believe Biden is ineffective at controlling inflation or is actively making it worse.




Biden still using Larry Summers’ monetarist playbook to get himself out of his political problem:




Which will mean the continued regressive high interest rate policy during this election year…. Democrats sacrificing their political prospects on the alter of monetarism…



Monday, March 4, 2024

British government designs fiscal policy within a flawed framework – result = poor policy — Bill Mitchell

This week, the UK Chancellor releases the latest fiscal statement (aka ‘the budget’) and will also have a eye to the general election which must be held before January 28, 2025. One would expect the government would stall the announcement and delay the election for as long as is possible, given the current situation and the cumulative impacts of 12 years of Tory rule, which are plain to see at all levels of British society. All the talk is of tax cuts, that typical ‘sugar hit’ approach to winning votes that soon works it way out of the system. The debate as to what the British government should now be doing is clouded, as these debates are always clouded, by the input of organisations such as the Office of Budget Responsibility, which claims its charter is to “to examine and report on the sustainability of the public finances”, yet consistently provides input which is irrelevant to the substance of the issue and just feeds the flawed political scrum. In the end, the policy choices are not based on the actual opportunities and threats that are available to and confront the currency-issuing government but rather a fictional mindset that all the players are trapped within.
William Mitchell — Modern Monetary Theory
British government designs fiscal policy within a flawed framework – result = poor policy
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also

 Simplicius comments on a recent Rasmussen article. The polling data reinforce similar conclusions others have drawn as well about the great class divide that is is worsening under the neoliberal framework.

One wonders whether some cognitive bias may be responsible or is it more the result of pursuing class interest. Or rent-seeking behavior. Or was it more the deadly combination of wealth and power that already destroyed the Empire on which "the sun never sets" and shifted it to the American elites. Now the British elites appear to be at least as enclosed in their bubbles as their American counterparts as the remants of empire are being challenged.

Dark Futura
America's Super-Elite Disconnect
Simplicius

See also the Tory reaction to George Galloway's win. Speaking truth to power.

Consortium News
MSM Target Galloway at Victory Party
Joe Lauria reporting from Rochdale, England


Friday, March 1, 2024

Prince: How to flood Hamas tunnels

 

Prince is ripping off my stuff! … I was saying this a week after the attack duh…. sheesh no brainer..





Saturday, February 24, 2024

As US Modern Monetary Theory advocates make their case in Australia, Gareth Vaughan explains the world through their lens and how it might go down in New Zealand — Gareth Vaughan

 This article, which is favorable to MMT, contains a good explanation of what MMT is and isn't.

interest.co.nz
As US Modern Monetary Theory advocates make their case in Australia, Gareth Vaughan explains the world through their lens and how it might go down in New Zealand
Gareth Vaughan

Another side of the story.
[US] Conservatives, [El Salvador’s President Nayib Bukele] said, “always tell me that the problem is high taxes, but they are wrong.”

“The real problem is that you pay high taxes only to uphold the illusion that you are funding the government, which you are not,” he claimed, before describing how the government is financed by Treasury bonds, which are purchased by the Federal Reserve with printed money backed by the bonds themselves.

“The government is funded by money printing, paper backed by paper. A bubble that will inevitably burst,” he said, adding that “the situation is even worse than it seems, because if most Americans and the rest of the world were to become aware of this farce, confidence in your currency would be lost. The dollar will fall, and Western civilization with it.”
RT — Question More (Russian state-sponsored media)

Friday, February 23, 2024

Argentina Economy Shrank in December by Most Since Pandemic

 

“Oh sheeeeeeeeeeit!”….  😂😂😂





Monday, February 19, 2024

Japan sinks into recession – but there is more to the story than the mainstream narrative would care to admit — Bill Mitchell

Last week (February 15, 2024), the Japanese Cabinet Office released the latest national accounts estimates for the December-quarter 2023 – Quarterly Estimates of GDP for Oct.-Dec. 2023 (The First preliminary) – which showed that the economy had slipped into an official recession (two consecutive quarters of negative GDP growth) and in the process had moved from being the third largest economy in the world to become the fourth behind the US, China and Germany. According to the media release – 2023年10~12月期四半期別GDP速報 – the quarterly growth rate was -0.1 per cent (annual -0.4 per cent). Domestic demand was weak, contributing -0.3 per cent while net exports contributed +0.2 per cent. Part of the story is related to a ‘valuation drop’ because the yen has depreciated in recent months, undermining the value of exports and increasing the value of imports. But while there is some hysteria in the ‘markets’ and the mainstream economics commentary about the result, caution is required because the data will be revised (it was only preliminary) as more data comes in and it is highly possible for the negative to become a positive. But, I also take a different perspective on this from the dominant narrative in the media as you will see if you read on.

There is quite a deal of misunderstanding about the so-called ‘lost decade’ in Japan, following its dramatic real estate crash in the early 1990s.

The current narrative builds on those misunderstandings and constructs the GDP outcomes as if low growth is a problem.

If you look at the next graph you will start to get the point....
William Mitchell — Modern Monetary Theory
Japan sinks into recession – but there is more to the story than the mainstream narrative would care to admit
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Friday, February 16, 2024

The Smith Family manga–Episode 12– the Season 1 finale–is now available — Bill Mitchell

Episode 12 – the finale for Season 1 in our new Manga series – The Smith Family and their Adventures with Money – is now available. We will let everyone calm down from the excitement for a little while to give us time to write and draw Season 2, which will begin on May 24, 2024.

In the meantime, have a bit of fun with it and circulate it to those who you think will benefit …
William Mitchell — Modern Monetary Theory
The Smith Family manga – Episode 12 – the Season 1 finale – is now available
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Wednesday, February 14, 2024

Job Guarantee and Employer of Last Resort schemes: the political constraints on maintaining full employment — Nick Johnson

Kalecki

The Political Economy of Development
Job Guarantee and Employer of Last Resort schemes: the political constraints on maintaining full employment
Nick Johnson

US inflation rate is declining – no case for further rate rises — Bill Mitchell

 The US CPI data released yesterday showed that inflation continues to decline and the so-called ‘surprise’ that seems to have shocked the ‘markets’ are mostly down to the eccentric way the US Bureau of Labor Statistics calculates housing costs. The data provides no justification for further rate hikes in the US or anywhere else for that matter....
William Mitchell — Modern Monetary Theory
US inflation rate is declining – no case for further rate rises
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Sunday, February 11, 2024

Why economics is an impossible science — Lars P. Syll

 The title might better read, Why orthodox economics is an impossible science. While so-called orthodox economics fits this bill, it doesn't necessarily apply to so-called heterodox schools like MMT.

One of the characteristic criticisms of MMY economists by so-called orthodox economists (like Paul Krugman) is "Where's your model?" For neoclassical" economists, who assume formalization as a sine qua non of doing economics, required methodological assumptions include "equilibrium and maximization" as Krugman is fond of saying. 

The post linked to below objects that this not even possible given the attendant conditions, other than as a "toy model" serving as "a teaching tool." Such models cannot underlie a casual explanation of real change in the world of events that economists then assume themselves perfectly capable of not only explaining but also prescribing. Their results speak for themselves.

Instead, MMT adopts an historical and institutional approach which recognizes economics as a study of events from particular perspectives that are conditioned by both subjective and objective considerations instead of presuming that economics is based on invariant principles similar to the natural sciences.

Economics is unlike physics and chemistry as natural sciences but it partakes of the life sciences including their extensions as the social sciences. While these "science" qualify as "science" owing to their assumption of naturalism and use the scientific method, the application of method is determined by the type of subject matter. The life and social science differ from the natural sciences in approach in that they types of data they study and seek to explain are quite different from the phenomena studied by natural sciences. 

A good example of this is an unsourced quote widely attributed to Richard Feynman, "Imagine how much harder physics would be if electrons had feelings." However, the issue goes much deeper institutionally since economics and finance are joined at the hip, economic data being reported not only in real terms but also nominal with the nominal taking precedence since monetary value in exchange is the basis of reporting about economic data. As a result, conditions that affect this supervene in economics, as MMT economists recognize. These conditions are historical and institutional.

Lars P. Syll’s Blog
Why economics is an impossible science
Lars P. Syll | Professor, Malmo University

Saturday, February 10, 2024

Yi Gang on China's Digital Yuan — Zichen Wang

Former Central Bank governor lectures on the theories and practices of China's ambitious central bank digital currency.

China appears to be the most ambitious among major economies to develop its central bank digital currency - the digital yuan, and we have covered its development before.

On October 10, 2023, Yi Gang, China’s central bank governor between 2018 and 2023 gave a public lecture at Tsinghua University entitled 数字人民币的相关理论与实践 Theories and Practices Related to the Digital Yuan....

Almost everything you wanted to know about the digital yuan. 

Pekingnology
Yi Gang on China's Digital Yuan
Zichen Wang

Tuesday, February 6, 2024

What is Yi Gang trying to say in his 1st interview after retiring from PBoC? — Zichen Wang

Not about MMT but rather about "money."
Today, I am sharing a January 12, 2024 interview of Yi Gang, former Governor of the People’s Bank of China, by 金融时报 Jinrong Shibao (literally Financial Times), a newspaper by the central bank.

Yi obtained his Ph.D. in Economics from the University of Illinois Urbana–Champaign and became an Associate Professor with tenure at Indiana University–Purdue University Indianapolis, before going back to Peking University, his alma mater. He later joined the People’s Bank of China and rose through its ranks until heading it between 2018 and 2023.

Yi retired in July last year and his five-year tenure at the helm of China’s central bank is known for, according to Bloomberg, “a restrained policy approach focused on moderate stimulus and reducing financial risks in the economy.”
Pekingology
What is Yi Gang trying to say in his 1st interview after retiring from PBoC?
Zichen Wang

See also
In attrition war, on the economic front just like the Gaza and other fire fronts, the Axis of Resistance wins by maintaining its offensive capacities and operations for longer than the US and US-backed Israeli forces can defend. Like troops, tanks, and artillery pieces, the operational goal is to grind the enemy slowly but surely into retreat, then capitulation.

How to measure if this is happening now to the Israelis in the international money markets?

An international currency and bond trader answers by providing, first, a primer for each of the market indicators, and how to read them; and then a ready reckoner for the damage being done to Israel’s economic resources as those who operate in the money markets gauge their opportunity.

For making money, you see, the opportunity of capitalizing on Israel’s defeat may soon be more profitable than investing in its success. When the markets see this chance at profit-making, usually long before the politicians and their captive media acknowledge it, there is an inflection point in the flow of money. That does its damage, not by hitting the Israelis and Americans in their bunkers with bullets and bombs, but by moving the money the US-backed Israeli entity needs out of reach, and cutting them off, both the US and Israel, from market confidence that they can win their war, genocide or not.

The writer of this primer and money-market assessment has requested anonymity to protect against retaliation from the US, Israel or their allies.
Dances with Bears

Yves Smith comments on the above post here. She has some issues with it.

Saturday, February 3, 2024

Samuelson on the legacy we leave for grandchildren — Richard Murphy

Paul Samuelson, the author of what still might be the most-sold textbook of the post-war era had this to say on page 427 of his first edition, addressing a subject then very close to the thoughts of many of his readers:
Can it be truthfully said that “internal borrowing shifts the war burden to future generations while taxing places it on the present generation”? A thousand times no! The present generation must still give up resources to produce the munitions hurled at the enemy. In the future, some of our grandchildren will be giving up goods and services to other grandchildren. That is the nub of the matter. The only way in which we can impose a direct burden on the future nation as a whole is by incurring an external debt or by passing along less capital equipment to our posterity.
Funding the Future
Samuelson on the legacy we leave for grandchildren
Richard Murphy