Clint Ballinger — Endogenous money, MMT, Positive Money, & financial reform

Clint Ballinger
Endogenous money, MMT, Positive Money, & financial reform

Clint Ballinger

PM responds:

Positive Money

To what extent can Positive Money and Modern Monetary Theory join forces?

Frank Van Lerven

Frank Van Lerven — Positive Money versus Modern Monetary Theory

A recent blog by Clint Ballinger highlights some of the similarities and differences between Positive Money’s proposals and those of Modern Monetary Theory (MMT) and other Post-Keynesian types of analysis. We thought Ballinger makes some good points that are worth highlighting, before suggesting where we think his review could be improved.....

Positive Money

Positive Money versus Modern Monetary Theory

Frank Van Lerven

Clint Balinger — Small c chartalism, sovereign money, & public policy space v. private profit space

As a newcomer to study of monetary economics and finance who is neither an economist nor a finance professional, Clint suggests   the need for a glossary of agreed upon technical definitions and consistency of their use in context for the sake of brevity, clarity and precision of expression in a rather complicated field. I second the motion. It would make understanding easier and debate more straightforward. Even those that think the definitions are already well elaborated in the literature should not be opposed to creating a glossary that would serve as a standard across the spectrum of discussion. Presuming that is the case, who is going to do it, and who gets to vote on the outcome?

Clint Balinger

Small c chartalism, sovereign money, & public policy space v. private profit space

This relates perhaps to Paul Krugman post, Ideology and Economics, holding that a research study shows agreement in economics over a normal paradigm, presumably one with a Walrasian neoclassical foundation in general equilibrium. But the study was conducted using a group of six economists selected from the seven "top schools." From the seven top schools? Selection in and out is the objection, and the study clearly has a selectivity bias.

Clint Balinger — Modern Monetary Theory & Full Reserve Banking: Connected by Fiat

Summary: MMT understands the monetary system in depth, particularly a fiat monetary system. “Full Reservers”, because they have not always fully grasped the significance of the fact there is no money multiplier and that the loanable funds model is wrong, often have a misplaced emphasis on the reserve ratio and sight deposits. Nevertheless, they can be understood ultimately to be worried about endogenous money, and in effect are arguing for a pure fiat money system. Steve Keen shows the magnitude of the negative effects of endogenous money on the economy. If Keen is properly understood, and what are in effect the anti-endogenous money policies of Full Reserve plans implemented, the end point is a pure fiat money system. And the starting point of a true chartalist system, the natural home for neo-chartalism.

Clint Balinger
Modern Monetary Theory & Full Reserve Banking: Connected by Fiat

Again, seems to me to be confused about what fiat is.

Clint Balinger — MMT can address operational realities or analyze a Chartalist system. But it cannot do both.

MMT can either address operational realities, or analyze a chartalist system. But it cannot do both, because the operational reality is that we do not have a true fiat currency and are not operating in a true chartalist environment.

There may be moves away from this operational reality that lead to full employment, a more just economic system, and greater price stability. There is good evidence that a highly useful move would be to change to a true fiat currency system.

Clint Balinger
MMT can address operational realities or analyze a Chartalist system. But it cannot do both.

Seems that Clint is confused about this. MMT describes the existing fiat system and shows policy makers how to take advantage of the policy space it affords in order to harmonize the trifecta of growth (production and productivity), employment and price stability.

Clint Ballinger — Post Keynesianism, MMT, & 100% Reserves Project, Post No. 2

Taken from the comments on my last post on MMT/Chicago Plan/FRB & several similar pages the Questions below seem to be the central questions/objections between Full RB & MMT (or Post Keynesian, or MR).

Answering them clearly I think could reduce “talking past” each other. These Qs touch on the most fundamental differences, avoiding digressions.

Help in answering these is greatly appreciated. (PS Is using the comment section below uncomfortable? I may try to set up a wiki if enough people want).

Clint Ballinger

Post Keynesianism, MMT, & 100% Reserves Project, Post No. 2

Comment there, here, or both.

Clint Ballinger — Post Keynesianism, MMT, & 100% Reserves Project: Question #1

[This is part of an ongoing effort to understand and explain differences and points of agreement between Modern Monetary Theory, Full Reserve Banking, Post Keynesianism, Steve Keen’s work, and related approaches in as simple of terms as possible (difficult, as the debates hinge on complex and subtle concepts at times, but I will try). The goal is to create a resource for the general public to better understand these areas of study and why neoclassical economics fails, and to foster clearer communication between MMT, FRB, and PK proponents.]

If this is of interest, check out the comments over there, too. CB clarifies in light of some off-blog responses.

Clint Ballinger — On good urbanism, sane economics, & problems in the social sciences
Post Keynesianism, MMT, & 100% Reserves Project: Question #1
Clint Ballinger
(h/t Matt Franko in the comments)