Sunday, December 30, 2012

Scott Fulwiller — Functional Finance and the Debt Ratio—Part I

This five part series will explore at length (warning!) and in detail (another warning—wonk alert!) the MMT perspective on the debt ratio and fiscal sustainability. While the approach suggests a macroeconomic policy mix and strategies for both fiscal and monetary policies that most neoclassical economists currently believe are unsustainable, ultimately the MMT preference for a significant role for fiscal policy in macroeconomic stabilization is shown to be consistent with traditional neoclassical views on fiscal sustainability.
This first part defines the correct measure of the national debt and then looks at the mathematics of debt service and the debt ratio.
New Economic Perspectives
Functional Finance and the Debt Ratio—Part I
Scott Fulwiller | James A. Leach Chair in Banking and Monetary Economics and an Associate Professor of Economics at Wartburg College


geerussell said...

I'm really looking forward to reading and re-reading the rest of this series.

Tom Hickey said...

Right, this is the real stumbling block at the center of all the austerity nonsense that's creating a huge drag needlessly due to fear of monsters under the bed.

Ralph Musgrave said...

I sorted out the question addressed by Fulwiller in a few hundred words here:

Well, I sorted it out to my own satisfaction - not sure about anyone else.