An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Nice article by Positive Money, but I’ve got doubts about that £2.1 trillion of “lost seigniorage” shown on the first chart.
The fact that private banks create £X of money over a given period does not mean that if money creation is confined to the central bank (which is what PM wants) that the government / central bank would have been able to print and spend £X. Reason is that money created by private banks nets to nothing: it’s not a net asset for the private sector (as most MMTers are well aware). In contrast, central bank money definitely is a net asset.
In short, there will doubtless be some lost seigniorage, but it could be vastly less than £2.1 trillion.
1 comment:
Nice article by Positive Money, but I’ve got doubts about that £2.1 trillion of “lost seigniorage” shown on the first chart.
The fact that private banks create £X of money over a given period does not mean that if money creation is confined to the central bank (which is what PM wants) that the government / central bank would have been able to print and spend £X. Reason is that money created by private banks nets to nothing: it’s not a net asset for the private sector (as most MMTers are well aware). In contrast, central bank money definitely is a net asset.
In short, there will doubtless be some lost seigniorage, but it could be vastly less than £2.1 trillion.
Post a Comment