tag:blogger.com,1999:blog-5902253799556549537.post2690932309548081720..comments2024-03-20T02:13:07.412-04:00Comments on Fictional Reserve Barking: Deficit myths (Part 2): The effect of deficits on macroeconomic stabilitycircuithttp://www.blogger.com/profile/08565443970730261572noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-5902253799556549537.post-83919138615611051132011-11-14T09:56:24.607-05:002011-11-14T09:56:24.607-05:00JH, GC: the alternative paradigm that MMT and circ...JH, GC: the alternative paradigm that MMT and circuit theory present is also highly compatible with the accounting perspective contained in systems of national accounts. It's a useful approach for interpreting the flows from the private sector to public sector, and vice versa. From an analytical standpoint, it's also effective for determining the effect on the economy of past treasury policy. IMO, its policy recommendations are in line with the best that Keynes, Tarshis, Lerner and Boulding had to offer. Add to that the more recent focus on the endogenous nature of money and the implications of a monetary, credit-based economy (à la Schumpeter/circuitiste), the paradigm should be the workhorse of pragmatically-oriented policymakers. Had the framework been applied in 08'-09', we'd probably be talking about supply sectoral shortages in the workforce by now. In sum, I agree with your comments. Big victories usually arise after years of small, incremental changes in approach (Lindblom applied to paradigm shifts). Idealism too is necessary, but pragmatism must prevail in the end. (See Colander, 'Keynes a Keynesian or Lernerian, p. 1574)<br /><br />http://community.middlebury.edu/~colander/articles/was_keynes_keynesian.pdf<br /><br />Swells, I agree: if your eyes aren't on the rate of unemployment, you're probably reading the wrong books or listening to bad advice. Period. BTW, I'm not too optimistic about the replacements.circuithttps://www.blogger.com/profile/08565443970730261572noreply@blogger.comtag:blogger.com,1999:blog-5902253799556549537.post-91609841717580498372011-11-13T19:12:09.297-05:002011-11-13T19:12:09.297-05:00There's a rule of thumb that designates suppos...There's a rule of thumb that designates supposedly keynesians as promoting first price stability. It's a rule of thumb paneled in the Keynes-for-the-birds pulps, where the birds are usually the authors. JMK was and is foremost about full employment. Nod to the lot above that remind the birds that their eyes-view is nought (allow the archaic)<br /><br />I trust that Draghi will not mime Lagarde's rhyme on deficits, and that along with Draghi, Papademos and Monti remember their alma maters. What Europe needs is jobs, not razes on expenditures, otherwise, we'll end up with a Wasteland on all sides of the oceans, the likes of which has n'er been seen. <br /><br />No one should delude themselves in the illusory improvements of Ireland and Iceland-sovereign categories that have little political and social semblance to Italy, Greece and Spain.<br /><br />The emphasis on austerity is quasi hysterical. Stay the course Circuit.B.Swellshttps://www.blogger.com/profile/13800749885538075676noreply@blogger.comtag:blogger.com,1999:blog-5902253799556549537.post-48110158270285068912011-11-13T07:56:19.430-05:002011-11-13T07:56:19.430-05:00thanks for the Lavoie link. quite honestly, much o...thanks for the Lavoie link. quite honestly, much of the 'MMT' blogsphere reminds me of a good car spinning on ice. it is a recital stage...and in the end, very little value is added by that medium. i don't want to conjure the worst but Lavoie's paper was far too generous towards some and far too lenient with others. <br /><br />he stands in a class of his own as does his ottawa colleague Seccareccia when it comes to pivoting (post)-keynesian positions intelligently. <br /><br />i guess mending fences is the first reasonable step in the symbolic breaking down of walls. maybe Lavoie wants to unite the theoretical positions. good luckJH Crawhttps://www.blogger.com/profile/08829348139831448877noreply@blogger.comtag:blogger.com,1999:blog-5902253799556549537.post-29889575676294874362011-11-12T20:48:54.865-05:002011-11-12T20:48:54.865-05:00Fine article, circuit nod!. With all due respect t...Fine article, circuit nod!. With all due respect to PK, I think you did a better job debunking Krugman's 'welfare demons' than PK did himself. He would be impressed.<br /><br />As a second, I was linked to your conversation with NW et al on heteconomist. Good exchanges. The site is good. <br /><br />I think it pragmatic ( for both theory and policy)to deal with factual events and states of affairs especially when attempting to establish legitimacy in a world of complex organizations (here I follow Simon and CAS premises). On the other hand I commend the position that wants it all. Unfortunately, policy doesn't work that way. Policy addresses factuals and tries to preclude or minimize the risks of unintended consequences, something that dabbling with 'ideals' usually encumbers. There could be numerous political permutations and each would necessitate a variant circuit. <br /><br />As far as my reading of the exchange, you didn't preclude a consideration of ideals, you preferred a less polemical and more pragmatic approach. <br /><br />As far as falling into 'conventional' traps, once the paradigm shift is processed, the conventions fall apart and the language as well as the optics are irreversibly transformed to represent the paradigm. I see no 'ghost' haunting the new institutions.<br /><br />But nod to Wilson, he wants it all, and that's commendable. But so did Smith and Marx, to think it all.GChttps://www.blogger.com/profile/08375318534115974204noreply@blogger.comtag:blogger.com,1999:blog-5902253799556549537.post-11783127779910206102011-11-11T18:26:29.065-05:002011-11-11T18:26:29.065-05:00Thanks JL, I added charts in an Addendum with data...Thanks JL, I added charts in an Addendum with data on Ireland (blue), Spain (red) and Iceland (green).circuithttps://www.blogger.com/profile/08565443970730261572noreply@blogger.comtag:blogger.com,1999:blog-5902253799556549537.post-83577000494805554302011-11-11T17:27:09.144-05:002011-11-11T17:27:09.144-05:00Ireland and Iceland were also countires running si...Ireland and Iceland were also countires running sizeable fiscal surpluses prior to the crisis (with bankers gone wild of course). The funny thing is that both were poster child countries of how a national economy should be ran for a big chunk of the economist profession.Jos Laliberténoreply@blogger.com