Tuesday, May 3, 2011

The IGBC Goes the Way of the Money Multiplier

Trader's Crucible dispatches the intertemporal government budget constraint (IGBC). It's a short post, so I won't try to summarize it.

The concise way to destroy the IGBC, and why to destroy it

Hint: MMT has shown how the money multiplier is an ex post artfact rather than an ex ante cause. So is the IGBC. Since both are ex post rather than ex ante, as the mainstream incorrectly supposes, mainstream thinking about them is simply backwards.


Anonymous said...

It wasn't me - it was Peter D. I said it the long, confusing way. Peter D said it the concise, easy to understand way. Props to him, again.

Letsgetitdone said...

That's a great piece. And I liked TC's emphasis on "observables." To much in economics is assumed without test. It's a 'confidence" game!