Elkarrizketa:
Interview of Scenarieconomici.it to Warren Mosler, the US economist founder of postkeynesian economic school of Modern Money Theory1 (March 15, 2014)
About MMT
1) What is the most important point that must be clear for a student that approachs MMT?
ME/MMT is about how a currency works and interacts with the real economy.
2) “Monetary sovereignty” is a common principle today, but it’s more difficult understanding howthe State could generate wealth by using deficit spending. It’s a thinking that goes against the “common sense”. Could you explain it in few words?
ME/MMT makes it clear it’s not about generating real wealth, as it’s true you can’t get something from nothing. ME/MMT shows how there is no unemployment when there is no state currency and no state taxation, and that unemployment is the result of specific policies, and not an ‘act of God’. That is, government policy can restrict employment and the activities that create real wealth, and removing those restrictions can restore that real wealth creation. Additionally, ME/MMT is about how public infrastructure can enhance real wealth or, alternatively, it can destroy it.
3) Someone thinks that MMT fits only to USA because the US dollar is the international reserve currency. If this would be true, MMT wouldn’t be applicable to the other countries. How could you answer about this issue?
ME/MMT analysis applies to all currencies. Yes, it is true that many nations hold $US reserves is a benefit to the US, but that is a separate ME/MMT discussion.
4) What is the thing that a State with monetary sovereignty should absolutely avoid?
Unemployment.
About Italy
5) If you would be Ministry of the Economy, how would you help Italy to “revive”? Could you explain to us the principal actions you would take?
First I would petition the EU to relax the deficit limits to 8% of GDP from the current 3% limit. At the same time I would ask that the implied guarantee of member nation debt be entered into law. And I would also ask the EU to have the ECB fund a transition job for anyone willing and able to work to facilitate the transitions from unemployment to private sector employment.
6) You know perfectly that Italy lost (between 1995 and today), the 18% of GDP related to EU average value, and that there is, in European economic context too, an increasing trend into decline. It’s clear that there are structural problems in Italy and, in addition to this, that Italian economy didn’t adapt itself to a fixed exchange rate monetary system. Do you recommend that Italy should exit from Euro? How should the euro-exit be done, technically?
First I would petition the EU for the above modifications, and give them no more than 90 days to respond. If they refuse, I would have Italy begin taxing and spending in lira to enact the recommended changes needed to sustain full employment.
7) On www.scenarieconomici.it we support the position that it’s necessary a significative reduction of public expenditure and a contemporaneous reduction on the level of taxation, and a releasing of investments, and we elaborated detailed proposals about these points. Do you think that these type of plans would be really applicable in Italy?
Italy and the rest of the EU needs larger public deficits. This can be done with tax reductions and/or spending increases, but if the deficit is not increased the unemployment will continue.
8) In your opinion the italian public debt should be honored as it is, or should it be repudiated and restructure it?
With my above proposals the debt would be ‘honored’ and remain as the net savings for the economy.
9) Thank you for this interview. May you send to our readers a message of hope in the future?
There is hope when the leaders begin to understand that the public deficit needs to be larger rather than smaller.
Ikastaroa:
RANDALL WRAY ALL’UNIVERSITÀ DI BERGAMO2
Dopo Warren Mosler, l’Università di Bergamo ospiterà un altro importante economista MMT in qualità di visiting professor. Infatti il prof. Randall Wray sarà per 9 giorni, dal 13 al 22 maggio, professore nel corso di Macroeconomics all’interno del Master in Economics and Global Market presso l’università di Bergamo grazie allo sforzo del professor Riccardo Bellofiore.
Ivan Invernizzi referente economico di Rete MMT è iscritto al corso di R.Wray e in accordo con i docenti, predisporrà delle sintesi delle lezioni del professor Wray.Ivan, riprenderà le lezioni che poi verranno pubblicate dall’Università e rilanciate da Rete MMT. Le lezioni si terranno in inglese così come il Master.
Contenuti corso
A) THE MAINSTREAM MODEL
Aggregate Demand, Aggregate Supply and Business Cycles
Inflation, Unemployment and Monetary Rules
Labour Markets and Supply-Side Policies
Monetary Policy
Fiscal Policy
B) THE POSTKEYNESIAN ALTERNATIVES
The Post-Keynesian Heterodoxy
Heterodox Microeconomic Foundations
A Macroeconomic Monetary Circuit
The Short-Period: Effective Demand and the Labour Market
The Long-Period: Old and New Growth Models
C) THE MONETARY THEORY OF PRODUCTION AND FINANCIAL KEYNESIANISM
Capitalist reproduction, cycle and crisis: Marx to Luxemburg and Kalecki
Earlier circuitist views: Wicksell and Schumpeter
A monetary economy; The creation of bank money; The distribution of income; The role of financial markets; Real and monetary interest; Implications for monetary policy
Prelude to Minsky and Financial Keynesianism
SPECIAL SEMINAR on MACROECONOMICS by L. RANDALL WRAY
Titoli lezioni
Lecture 1: Keynes’s General Theory, Before and After
Lecture 2: Post-War Macroeconomics
Lecture 3: Introduction to Minsky: Foundations in Early Work
Lecture 4: Minsky’s Development of an Alternative Approach
Lecture 5: Heterodox approaches to Theory and Policy
Lecture 6: Stabilizing an Unstable Economy
Lecture 7: Towards a New Paradigm. Reconstruction of Macroeconomic Theory and Policy.
Le lezione ciascuna di 3 ore saranno alle 9,30 nei giorni 13,19 e 20; alle 14,30 nei giorni 14,15 e 21. Alle 16,30 il giorno 18 e alle 15 il giorno 22
(Gogoratu Modern Monetary Theory: http://neweconomicperspectives.org/modern-monetary-theory-primer.html)
Twiterrak3:
Richard Werner @ProfessorWerner mai. 13
@netbacker @SerbanVCEnache @stf18 @wbmosler @neilwilson @mmt_rod My point is that deficit spending not backed by bank credit creation fails
Warren B. Mosler @wbmosler mai. 13
@ProfessorWerner @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod Def spending allways adds that much income and savings to the econ.
Warren B. Mosler @wbmosler mai. 14
@ProfessorWerner @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod Tsy secs are functionally savings accts/time deposits at the Fed
Richard Werner @ProfessorWerner mai. 14
@wbmosler @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod Functionally, the Fed could be the government. In reality, it is not.
@ProfessorWerner @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod ??FedResAct sets rules, profits to tsy, leaders set by Pres/Congress
Neil Wilson @neilwilson mai. 15
@ProfessorWerner @wbmosler @netbacker @SerbanVCEnache @stf18 @mmt_rod Fed is agent of Treasury: Bernanke said so in evidence.
Twiterrak4:
Richard Werner @ProfessorWerner mai. 13
@wbmosler @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod Gross positive. But whether net positive depends on funding. Bonds no good
Richard Werner @ProfessorWerner mai. 13
@wbmosler @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod You are assuming monetisation. This assumption doesn’t necessarily hold
Scott Fullwiler @stf18 mai. 14
@ProfessorWerner @wbmosler @netbacker @SerbanVCEnache @neilwilson @mmt_rod Warren’s point has nothing to do with monetization
Warren B. Mosler @wbmosler mai. 14
@ProfessorWerner @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod Tsy secs are functionally savings accts/time deposits at the Fed
Richard Werner @ProfessorWerner mai. 14
@stf18 @wbmosler @netbacker @SerbanVCEnache @neilwilson @mmt_rod That might be the issue then..
Richard Werner @ProfessorWerner mai. 14
@wbmosler @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod Functionally, the Fed could be the government. In reality, it is not.
Warren B. Mosler @wbmosler mai. 14
@ProfessorWerner @netbacker @SerbanVCEnache @stf18 @neilwilson @mmt_rod ??FedResAct sets rules, profits to tsy, leaders set by Pres/Congress
Neil Wilson @neilwilson mai. 15
@ProfessorWerner @wbmosler @netbacker @SerbanVCEnache @stf18 @mmt_rod Fed is agent of Treasury: Bernanke said so in evidence.
Neil Wilson @neilwilson mai. 15
@ProfessorWerner @wbmosler @netbacker @SerbanVCEnache @stf18 @mmt_rod BoE is *owned* by HM Treasury and is legally directed by them.
