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on Post Keynesian Economics |
| By: | Goodhart, C. A. E. |
| Abstract: | During the last two centuries there have been four main approaches to analysing the determination of the money supply, to wit: (1) Deposits cause Loans, (2) The Monetary Base Multiplier, (3) The Credit Counterparts Approach and (4) Loans cause Deposits. All four approaches are criticized, especially (2) which used to be the standard academic model, and (4) which is now taking over as the consensus approach. Instead, I argue that banking is a service industry, which sets the terms and conditions whereby the private sector can create additional money for itself. The problem is that such money creation tends to be highly procyclical, so the question then becomes finding the best trade-off between official control of that process and allowing sufficient flexibility for the private sector. I conclude by reviewing how Lord King's reform proposals, in his book on The End of Alchemy, might fit into this broader analysis. |
| JEL: | F3 G3 |
| Date: | 2017–09 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:84209&r=all |
| By: | Bullard, James B. (Federal Reserve Bank of St. Louis) |
| Abstract: | In a presentation at the 28th Annual Hyman P. Minsky Conference in Annandale-on-Hudson, N.Y., St. Louis Fed President James Bullard discussed his working paper on whether monetary policy can be conducted in a way that benefits all households even in a world with substantial income, financial wealth and consumption inequality. In the paper, nominal GDP targeting constitutes “optimal monetary policy for the masses,” he said. |
| Date: | 2019–04–17 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlps:337&r=all |
| By: | He Zengping; Jia Genliang |
| Abstract: | Local government debt in China is increasing and presents a great threat to China's financial stability. In China's fiscal system, the central government often prioritizes reducing its fiscal deficit and can determine to a great extent the distribution of revenue and expenditure between itself and local governments. There is therefore a tendency for the fiscal burden to be shifted from the central government to the local governments. Resolving China's local government debt problem requires not only strengthening regulation, but also abandoning the central government's fiscal balance target, because this target may make regulation hard to sustain in times of economic downturn. This paper discusses central-local fiscal relations in the framework of Modern Money Theory, suggesting that, because a government with currency sovereignty can always afford any spending denominated in its own currency, China's central government should bear a greater fiscal burden. |
| Keywords: | Local Government Debt; China; Modern Money Theory; Fiscal Systems |
| JEL: | G18 H74 H77 O53 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_932&r=all |
| By: | Matteo Deleidi; Mariana Mazzucato |
| Abstract: | The paper investigates the determinants of economic growth from both a theoretical and an empirical perspective. The paper combines the Sraffian supermultiplier model of growth with the Neo-Schumpeterian framework that emphasizes the entrepreneurial role of the state. We aim to detect the macroeconomic effect generated by alternative fiscal policies: generic ones and “mission-oriented” ones. Using a SVAR model for the US economy for the 1947–2018 period, we show that mission-oriented policies produce a larger positive effect on GDP (fiscal multiplier) and on private investment in R&D (crowd-in effect) than the effect produced by generic public expenditures. |
| Keywords: | Mission-oriented innovation policies, Sraffian supermultiplier, SVAR, fiscal multiplier, crowding-in effect. |
| JEL: | C32 E22 E62 O25 O30 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0248&r=all |
| By: | Joseph E. Stiglitz |
| Abstract: | Recognizing the importance of the second-best nature of economies, the Stern-Stiglitz report on carbon pricing departed from the recommendation of a single carbon price for all uses at all places and times. This paper provides some of the analytics behind these recommendations. First, I analyze the circumstances in which distributional concerns make desirable a tax or regulation inducing significant reductions in carbon usage in a carbon-intensive sector for which consumers are disproportionately rich. Such policies allow lower carbon prices elsewhere without exceeding carbon emission targets. The cost of the resulting production inefficiency may, under the identified circumstances, be less than the distributional benefits. The paper considers the circumstances in which such differential policies may be best implemented through regulation vs. differential pricing, as well as differential effects on political economy and norm setting. Second, I consider the effect of carbon price trajectories on induced innovation, providing general conditions under which the optimal carbon path should, at least eventually, be falling over time. Finally, I revisit the price-versus-quantity debate and highlight important aspects of the dynamic nature of the problem. |
| JEL: | A1 H23 K32 Q52 Q54 Q55 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25939&r=all |
| By: | Daniel Serra (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier) |
| Abstract: | The paper is an overview of the main significant advances in the knowledge of brain functioning by modern neuroscience that have contributed to the emergence of neuroeconomics and its rise over the past two decades. These advances are grouped over three non-independent topics referred to as the "emo-rational" brain, "social" brain, and "computational" brain. For each topic, it emphasizes findings considered as critical to the birth and development of neuroeconomics while highlighting some of prominent questions about which knowledge should be improved by future research. In parallel, it shows that the boundaries between neuroeconomics and several recent subfields of cognitive neuroscience, such as affective, social, and more generally, decision neuroscience, are rather porous. It suggests that a greater autonomy of neuroeconomics should perhaps come from the development of studies about more economic policy-oriented concerns. In order to make the paper accessible to a large audience the various neuroscientific notions used are defined and briefly explained. In the same way, for economists not specialized in experimental and behavioral economics, the definition of the main economic models referred to in the text is recalled. |
| Keywords: | neuroeconomics,neuroscience,behavioral economics,experimental economics |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpceem:halshs-02160907&r=all |