I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to complete the text by the end of this year. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.
The material today continues the derivation and significance of Michel Kalecki’s theory of profits and then considers the issue of economic fluctuations. The consideration of economic dynamics brings together the concept of the expenditure multiplier which demonstrated how an injection of spending into the economy would, if there was excess capacity, multiply as the extra income generated was re-spent, and the accelerator model of investment spending, which was introduced earlier in this chapter.
Kalecki’s Generalised Model of ProfitsBill Mitchell — billy blog
Introducing economic dynamics