07/11/2017

Barnaby, better to walk before we run | Bill Mitchell


Today I have been thinking about the macroeconomics textbook that Randy Wray and I are writing at present. We hope to complete it in the coming year. I also get many E-mails from readers expressing confusion with some of the basic national income concepts that underpin modern monetary theory (MMT). In recent days in the comments area, we have seen elaborate examples from utopia/dystopia which while interesting fail the basic national income tests of stock-flow consistency. Most of the logic used by deficit terrorists to underscore their demands for fiscal austerity are also based on a failure to understand these fundamental principles. So once again I provide a simple model to help us organise our thoughts and to delve into the elemental concepts. It is clear that in order to come to terms with more complicated aspects of MMT, one has to “walk before they can run”. So its back home today. Read on...

And more reading on this:
  1. A simple "business card" economy or where business cards are the money.
  2. What causes mass unemployment?
    Functional finance and modern monetary theory