Brett Scott — These 5 Rebel Movements Want To Change How Money Works

MMT gets a mention right at the top of the list.

Huff Post
These 5 Rebel Movements Want To Change How Money Works

Brett Scott

Peter Bofinger — The Mechanics of Cryptocurrency

More than forty years ago, Nobel laureate Friedrich von Hayek published a small book in which he called for the “denationalization of money.” For him, high inflation rates in all countries were proof that states were abusing their monopoly on issuing banknotes, and that only private money in competition could guarantee stable money. Hayek was more concerned with the regulatory principle of competition than with the question of how a competitive monetary system could be concretely shaped.

The success of Bitcoin and other cryptocurrencies today shows that there is indeed a market for such a private issue of money. It is however more than questionable whether a system with private currencies can actually replace the state-organized monetary systems and whether in the end a stable monetary system will emerge....

Denationalization of money would be the end of national sovereignty and thus the end of the modern national state and the Westphalian world order, replaced by a global market society. Whether this would be utopian or dystopian depends on one's assumptions and value system.

INET
The Mechanics of Cryptocurrency
Peter Bofinger | INET Global Commissioner

ht/ Yves Smith at Naked Capitalism

See also

NATIONAL CONFERENCE OF STATE LEGISLATURES BLOG | NCSL BLOG
CRYPTOCURRENCY: CURRENCY OF THE FUTURE OR JUST A FAD?
Heather Morton, program principal in Fiscal Affairs, covering financial services issues for NCSL

Alan R. Knight — We don't need a balanced budget amendment

Mentions MMT and Stephanie Kelton.

Charleston Gazette-Mail
Alan R. Knight: We don't need a balanced budget amendment
Alan R. Knight. retired editor of New England Farmer newspaper and formerly associate editor of American Agriculturist magazine, where he also wrote “The Uncommon Market,” an award-winning column that explored both the local and global marketplace into which farmers sell their products.

Eric Tymoigne — Money and Banking Part 15: Monetary Systems

Throughout this series, posts have used balance sheets extensively to get an understanding of the monetary operations of developed economies, but nothing has been said about what a monetary instrument is. It is time to spend some time on the nature of monetary instruments and the inner workings of monetary systems.…

New Economic Perspectives
Money and Banking Part 15: Monetary Systems
Eric Tymoigne | Associate Professor of Economics at Lewis and Clark College, Portland, Oregon; and Research Associate at the Levy Economics Institute of Bard College

Friedrich A. Hayek — A Free-Market Monetary System

Seems that everyone is discussing monetary systems now. Here is a short presentation of Hayek's view.

Ludwig von Mises Institute
A Free-Market Monetary System
Friedrich A. Hayek

As Hayek admits, there is no legal obstacle in most jurisdictions preventing some enterprising firms from putting his proposal to the test. So far, no takers. What does that say about the idea? 

Well, in fairness to Hayek he don't think that it would actually happen absent getting the govt out of money creation, because bankers can do very well under the present system and have no incentive to innovate. My response would be whether ending govt money creation and going to a private standard that would only emerge later after testing in marketplace could be managed with smooth transition. And even if it could, it there any actual evidence that it would work?

A history of exchange-rate regimes 1821 to the present

Chart of the history of exchange-rate regimes from 1821 to the present day

Gold Money
A history of exchange-rate regimes
Alasdair Macleod | FinanceAndEconomics.org
(h/t Kevin Fathi via email)

Romer on Reinhart-Rogoff

The Reinhart-Rogoff study emphasizes common patterns across crises. It eschews complicated statistical techniques, relying instead on simple graphs and averages. And the averages are stunning. For 14 major crises since 1929, the associated decline in real per capita gross domestic product averaged 9.3 percent. For postwar crises, it took an average of 4.4 years for output to return to its pre-crisis level.

But study their charts more closely and you’ll find that those averages mask remarkable variation.....

What explains the variations? Crises don’t happen in isolation. They’re often accompanied by other factors, which differ across episodes. For example, financial crises that happen along with currency crises tend to be followed by much more severe recessions.

Likewise, some panics follow particularly big declines in house and stock prices, which have damaging effects on their own. The most recent recession would likely have been severe — and the recovery slow — even if the financial system hadn’t been stressed, simply because of the decline in wealth and the climb in household indebtedness.

BUT an even larger determining factor is the policy response. Why was the Great Depression so much worse here than in Spain? According to an influential paper by Ehsan Choudhri and Levis Kochin, Spain benefited from not being on the gold standard. Its central bank was able to lend freely and increase the money supply after the panic. By contrast, in 1931, the Federal Reserve in the United States raised interest rates to defend its gold reserves and stay on the gold standard, setting off further declines in output and exacerbating the banking crisis.

Likewise, the policy response largely explains why output fell after the American banking panics in 1930 and 1931, but rose after the final wave in early 1933. After the first waves, the Fed did little, and President Herbert Hoover signed a big tax increase to replenish revenue. After the final wave, President Franklin D. Roosevelt abandoned the gold standard, increased the money supply and began a program of New Deal spending....

Read the whole post at The New York Times
A Financial Crisis Needn’t Be a Noose

Christina D. Romer, economics professor at the University of California, Berkeley, and former chairwoman of President Obama’s Council of Economic Advisers

So close and yet so far.