Sunday, December 9, 2012

Simon Wren-Lewis — Some Thoughts on Fiscal Rules

..the surviving UK fiscal rule (or ‘mandate’) ... says the government should achieve structural (cyclically adjusted) balance, excluding investment spending, within five years - where that five year period rolls forward.
mainly macro
Some Thoughts on Fiscal Rules
Simon Wren-Lewis | Professor of Economics, Oxford University

The MMT fiscal rule is that the size of the fiscal deficit is determined by a full employment budget, arrived at by offsetting consolidated non-government sector saving desire in the period. This is accomplished using the principles of functional finance, relying as much as possible on automatic stabilization and variable tax rates in light of the fiscal balance being endogenously determined relative to changing economic conditions.

1 comment:

Dan Kervick said...

Well said, Tom. Maybe some of those guys will get it some day.