Reply to Larry Summers
An ‘Either-Or’ approach to fiscal and monetary policy is mistaken
Larry Summers has delivered a pointed and sweeping critique of the prevailing consensus among central bankers. He rightly asserts that relian...
The Prudence Principle: a new rule for fiscal policy
Should the government run a budget deficit or a budget surplus? What size should the deficit or surplus be?
Devising a rule which allows the public to assess the integrity of government is a major challenge...
Cyclical sovereignty
Only two of the world’s major economic blocks appear to have cyclical autonomy - China and the United States. For many decades now, Japan’s ability to stimulate domestic demand has been trivial relative to cycl...
Dual interest rates always work
The future of monetary policy - Dual interest rates
The significance of dual interest rates remains under-appreciated. The European Central Bank, Bank of Japan, and the Bank of England’s facilities are by fa...
Presentation on dual interest rates
PM Europe roundtable...
It’s time for the ECB to use its monetary power
Eurozone growth has stalled and inflation is below the ECB’s definition of price stability. As the recent actions of ECB make clear, further monetary easing is necessary for the ECB to fulfil its mandate.
Un...
A reply to Stephanie Kelton
The crux of the MMT debate
This recent article by Stephanie Kelton is crystal clear and reveals the crux of the ‘MMT debate’. It’s all about central bank independence.
Also listen to this INET interview wi...
Redesigning monetary policy
We need a modern monetary policy (MMP). Policy needs redesigning for three fundamental reasons:
Firstly, the mental models for thinking about how the macro-economy in the developed world works have been brok...
Stock prices & r*
Economists pay insufficient attention to asset prices. Ask most economists what the relevance of the bond equity correlation is for fiscal policy and they will be baffled. You’ll be lucky if they know what you’...
More on post-interest rate monetary policy
Accounting objections to cash transfers don’t add up, and if CBs bought equity they could reduce inequality
There is growing recognition - most recently by Janet Yellen - that should another recession strike...