Randy Wray — A Better Way to Think about the “Twin Deficits”

(These remarks will be delivered today at the UBS European Conference in London.)

Multiplier Effect
A Better Way to Think about the “Twin Deficits”
L. Randall Wray | November 13, 2018

Ramanan — Paul Krugman, Twin Deficits And Centrism

Twin deficits and causality.

The Case for Concerted Action
Paul Krugman, Twin Deficits And Centrism
V. Ramanan

Charles Hugh Smith — Certainty, Complex Systems, and Unintended Consequences

Of particular interest because Smith is regularly posted at Zero Hedge. This should explode some heads over there.

Of Two Minds
Certainty, Complex Systems, and Unintended ConsequencesCharles Hugh Smith

Bill Mitchell — Twin Deficits and Sustainability Of Budget Deficits – Part 2

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime early in 2014. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.

Today continues the material that appeared in:

▪ Twin Deficits and Sustainability Of Budget Deficits – Part 1

Chapter 25 Recent Policy Debates

In this Chapter we consider the following policy debates:
▪ 25.1: Ageing, Social Security, and the Intergenerational Debate
▪ 25.2: Twin Deficits and Sustainability Of Budget Deficits
▪ 25.3: Fixed Versus Flexible Exchange Rates: Optimal Currency Areas, the Bancor, or Floating Rates?
▪ 25.4: Economic Growth: Demand or Supply Constrained?
▪ 25.5: Environmental Sustainability and Economic Growth

25.2 The twin deficits hypothesis

Bill Mitchell – billy blog
Twin Deficits and Sustainability Of Budget Deficits – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Bill Mitchell — Twin Deficits and Sustainability Of Budget Deficits – Part 1

I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime early in 2014. Comments are always welcome. Remember this is a textbook aimed at undergraduate students and so the writing will be different from my usual blog free-for-all. Note also that the text I post is just the work I am doing by way of the first draft so the material posted will not represent the complete text. Further it will change once the two of us have edited it.

 

Today I am writing about Section 25.2.

Chapter 25 Recent Policy Debates

In this Chapter we consider the following policy debates:
▪ 25.1: Ageing, Social Security, and the Intergenerational Debate
▪ 25.2: Twin Deficits and Sustainability Of Budget Deficits
▪ 25.3: Fixed Versus Flexible Exchange Rates: Optimal Currency Areas, the Bancor, or Floating Rates?
▪ 25.4: Economic Growth: Demand or Supply Constrained?
▪ 25.5: Environmental Sustainability and Economic Growth

25.2 The twin deficits hypothesis

Bill Mitchell – billy blog
Twin Deficits and Sustainability Of Budget Deficits – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at the Charles Darwin University, Northern Territory, Australia

Philip Pilkington — Why MMT is Right and the Dreamers are Wrong – Kaldor Versus the Kaldorians

Nicholas Kaldor was one of the most famous economists of the 20th century. He was considered by many to be the direct heir to John Maynard Keynes as he was not only an extremely accomplished theoretical economist but also played a key role in the construction of British economic policy after World War II and was an all-round politically savvy individual – he ended his life, like Keynes, with a Lordship.

We mention this because if you read his writings you note that there were really two Kaldors. One was the Kaldor of the halls of Cambridge University. This was the Kaldor of abstract mathematical models of how capitalist economies function (some of the finest ever produced, mind you). The other Kaldor was the Kaldor that actually analysed economic problems and proposed solutions – while keeping firmly in mind the political situation of whatever time he was giving advice.

Naked Capitalism
Philip Pilkington: Why MMT is Right and the Dreamers are Wrong – Kaldor Versus the Kaldorians

Economics v. political economy.

Phil and Ramanan debate in the comments.