Eric Tymoigne — Money and Banking – Part 2

The previous post reviewed basic balance-sheet mechanics. This post begins to apply them to the Federal Reserve System (Fed).

New Economic Perspectives
Money and Banking – Part 2
Eric Tymoigne

Bill Mitchell — Central bank propaganda from the US

Most regular readers and those who understand MMT already know this, but it is a good summary of the correct versus the erroneous notion of banking operations.

Bill Mitchell – billy blog
Central bank propaganda from the US
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Dirk Ehtns — China Credit Crunch – it’s the central bank, stupid!

The New York Times reports on the Chinese financial market mentioning a "credit crunch." However, it seems that the credit crunch is the equivalent of rising interest rates and nothing out of the ordinary....

econoblog101
China Credit Crunch – it’s the central bank, stupid!
Dirk Ehtns | Berlin School of Economics and Law

PBOC forcing lenders into line with its policy, not the market rate spiking as the gloom and doomers think.

A Fullwiler paper gets a mention, too.

Ralph Musgrave — Who cares if central banks make a so called “loss” when QE is unwound?

Those under the illusion that central banks can be viewed thru the lens of microeconomics (i.e. those who think a central bank can be compared to a COMMERCIAL bank or other commercial entity) are getting worried about the so called “loss” that central banks might make when QE is unwound. This Telegraph article is typical. Plus Andrea Leadsom (UK politician) also got worried about this point – see question 37 & 38 here.

In contrast, those who understand Modern Monetary Theory know better, and for the following reasons.
As Abba Lerner (founding father of MMT, according to some) put it (p.39 here):

“…government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and its withdrawal of money, shall all be undertaken with an eye only the RESULTS of those actions on the economy and not to any established traditional doctrine about what is sound or unsound.”

Ralphonomics
Who cares if central banks make a so called “loss” when QE is unwound?
Ralph Musgrave

Simon Wren-Lewis — What type of model should central banks use?

Why we are so screwed.

mainly macro
What type of model should central banks use?
Simon Wren-Lewis | Professor of Economics, Oxford University

Scott Fullwiler — Modern Central Bank Operations 2012 (presentation)

See it at Prezi

Modern Central Bank Operations 2012

Scott Fullwiler | James A. Leach Chair in Banking and Monetary Economics and Associate Professor of Economics, Wartburg College

Neil Wilson — The fixed exchange rate system at the heart of MMT

Systems thinker Neil Wilson gives a very clear exposition of how the exogenous (vertical) and endogenous (horizontal) system interact, with the central bank and its currency powers at the apex of the hierarchy that includes the Treasury and banks as public-private partnerships. This system is at the core of modern economies, all of which use state money as central bank created currency in addition to credit money created by bank loans that presupposes use of currency for final settlement.

Read it at 3spoken
The fixed exchange rate system at the heart of MMT

by Neil Wilson