tag:blogger.com,1999:blog-2546602206734889307.post2340542280375643057..comments2024-03-28T04:29:22.717+00:00Comments on mainly macro: Bill Mitchell's fantasy about Labour's fiscal ruleMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-2546602206734889307.post-25434958537057159022019-07-01T14:45:53.640+00:002019-07-01T14:45:53.640+00:00Thanks for this Simon. Opponents of the rule (who...Thanks for this Simon. Opponents of the rule (who make the argument laid out in your post) seem to conflate two closely related but distinct ideas: the 'lower bound' and being out of ammunition. You can be at the lower bound (the MPC stated this is 0.25% I believe), but still have ample ammunition in the form of credit easing, Q.E, etc. <br /><br />As you clearly stated the rule applies when the lower bound is hit, not when the MPC has "run out of ammunition". Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-14816422414022230362019-06-17T10:32:33.236+00:002019-06-17T10:32:33.236+00:00Bill's response on monetary policy used to fig...Bill's response on monetary policy used to fight recessions:<br />http://bilbo.economicoutlook.net/blog/?p=42522<br /><br />"In this final Part, we focus explicitly on Labour Party’s Fiscal Credibility Rule – which uses these neoliberal frames – and we show that it would fail in a deep recession, causing grief to a Labour government should it be in office at that time."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-61082239539366169972019-06-16T10:57:53.563+00:002019-06-16T10:57:53.563+00:00Macro ignorance: Why Simon Wren-Lewis does not com...Macro ignorance: Why Simon Wren-Lewis does not come to grips with the plain MMT-fraud<br /><br />Links on Simon Wren-Lewis on ‘Bill Mitchell’s fantasy about Labour’s fiscal rule’<br />https://axecorg.blogspot.com/2019/06/macro-ignorance-why-simon-wren-lewis.html<br /><br />Egmont Kakarot-HandtkeAXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-87902369852735772442019-06-15T17:53:13.972+00:002019-06-15T17:53:13.972+00:00Stepping aside from the MMT v NK battle- or fault-...Stepping aside from the MMT v NK battle- or fault-lines, for a moment, it does seem to a mere non-academic economist mortal, like myself, that the definition of the effective lower bound (ELB) needs to be firmed-up including when it suspends the FCR, in way that is understood and accepted; also, it is not clear -if the 'knock-out' is activated, according to the proposed (FCB) rules, how long the 'exceptional' fiscal stimulus, and, in what form, is allowed; once the MPC raisees raates above the ELB, or within the five year rolling period to balance the current budget?<br /><br />If the latter the government could extend it indefinitely, unless it was dated from the MPC decision to raise rates above the 'knockout' ELB level,which ten would need to be clearly defined within the FCB framework. <br /><br />The LCR is designed to be operated by a Labour Chancellor; it does seem that the 'knock-out' is there to to give some semblance of technocratic cover to something that he or she wants to do anyway. <br /><br />In that vein, if 'No deal' Brexit proceeds, I understand that the government plans an emergency fiscal stimulus in any case to prevent or mitigate a resulting recession. No doubt the current fiscal rule to balance the entire budget(crazy)and to reduce debt as a proportion of GDP will be extended without a blink. <br /><br />Both main parties want to raise (needed) spending on current programmes without linking such increases to salient and efficient sources of taxation, due to the anticipated electoral reaction - Conservative Contenders, including Johnson, are pledging to reduce taxes, simply to court support - defining the true fiscal crisis of the state, which can't be resolved by simply reclassifying current expenditures as investment. <br /><br />At the end of the day, all government's will adhere to fiscal rules, when it suits their own political interests, and will re-define or suspend them, when it is not.<br /><br />With due respect to SRL, I still am unclear as to how he would reconcile the use of fiscal policy as a macro-economic stabiliser in time of recession with the efficient longer-term planning of public services and investment within the context set by the true crisis of the fiscal state<br /><br />Perhaps that is because a new political economy, rather than technical refinements to NK and fiscal rule frameworks (largely discussed in a pay-wall journals) is required. <br /> <br /><br /><br /><br />John Newtonnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-45811293251137915142019-06-15T16:04:15.156+00:002019-06-15T16:04:15.156+00:00Economic policy and the skirmishes of failed/fake ...Economic policy and the skirmishes of failed/fake scientists<br />Comment on Simon Wren-Lewis on ‘Bill Mitchell’s fantasy about Labour’s fiscal rule’<br /><br />The status of economics is this: There is political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the monetary economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.<br /><br />Political economics is mere opinion, theoretical economics is knowledge: “In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum)<br /><br />And that is the problem: economists do not have the true theory. Because of this, economic policy guidance NEVER had sound scientific foundations. The major approaches ― Walrasianism, Keynesianism, Marxianism, Austrianism, MMT ― are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept of profit wrong.<br /><br />The macroeconomic models that underlie the argumentation of both Simon Wren-Lewis and Bill Mitchell are provably false.#1, #2, #3 This, in turn, means that the whole debate about the relative merits of monetary and fiscal policy is pointless from the scientific standpoint.#4 However, scientific irrelevance does mean political ineffectiveness.<br /><br />Both Simon Wren-Lewis and Bill Mitchell are not so much scientists as political agenda pushers.#5 What is currently at the top of the agenda of political economists is NOT AT ALL Labour’s Fiscal Rule but the possibility that Jeremy Corbyn becomes the next PM.<br /><br />What Simon Wren-Lewis fails to address is the economic fact that because of the macroeconomic Profit Law it holds Public Deficit = Private Profit.#6 Therefore, the MMT policy of deficit-spending/money-creation is clearly in the interest of the Oligarchy.#7 MMTers are fake Progressives.<br /><br />Whether both Simon Wren-Lewis and Bill Mitchell do not know the macroeconomic Profit Law or whether both intentionally misled the representatives and members of the Labour Party is at anybody’s guess.<br /><br />Egmont Kakarot-Handtke<br /><br />#1 Macroeconomics: Economists are too stupid for science<br />https://axecorg.blogspot.com/2019/04/macroeconomics-economists-are-too.html<br /><br />#2 MMT sucks<br />https://axecorg.blogspot.com/2018/12/mmt-sucks.html<br /><br />#3 MMT and the canonical macroeconomic model<br />https://axecorg.blogspot.com/2019/04/mmt-and-canonical-macroeconomic-model.html<br /><br />#4 Against the mainstream! Against MMT!<br />https://axecorg.blogspot.com/2019/06/against-mainstream-against-mmt.html<br /><br />#5 Economics as a cover for agenda pushing<br />https://axecorg.blogspot.com/2019/02/economics-as-cover-for-agenda-pushing.html<br /><br />#6 Are economics professors really that incompetent? Yes!<br />https://axecorg.blogspot.com/2019/06/are-economics-professors-really-that.html<br /><br />#7 MMT’s true program<br />https://axecorg.blogspot.com/2019/06/mmts-true-program.htmlAXEC / E.K-Hhttps://www.blogger.com/profile/10402274109039114416noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-80800455874099142382019-06-15T08:29:42.237+00:002019-06-15T08:29:42.237+00:00Just out of curiosity, why not go aggressively neg...Just out of curiosity, why not go aggressively negative on rates, or switch to NGDP targeting at the ZLB for expansionary policy? Miles Kimball has ideas for making negative rates more effective by applying them to cash, for example. <br /><br />I wouldn't look at examples like the ECB's insufficient negative rate policy as total failures. Rather take rates down to the neutral rate, and you should finally get traction.Antihttps://www.blogger.com/profile/17677035271760844211noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-12486957824545848312019-06-15T00:24:00.089+00:002019-06-15T00:24:00.089+00:00Ultimately MMT is void as it lacks real substance ...Ultimately MMT is void as it lacks real substance to back up promises.<br />The best it can offer is every commodity playing a devaluing game.<br />Does Kumhof write less since being on the Bank of England payroll, or have I missed some important insights?<br />prpjusticehttps://www.blogger.com/profile/10320614572726185472noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-61606628693937573702019-06-14T18:07:56.580+00:002019-06-14T18:07:56.580+00:00Obviously you know much more about the individuals...Obviously you know much more about the individuals who have made/make up the MPC of the Bank of England. But I don't think it is entirely implausible to believe the kind of people who make up the rate setting body of a central bank to have more of a focus on one of the bank's mandates than the other.<br /><br />For example, Paul Volcker in the 1970's decided the overriding goal of the federal reserve was to minimize inflation regardless of the impact on employment. And the rate setting policy reflected that belief.<br /><br />And in your scenario of what a Labour Chancellor might do in response to the MPC setting rates with a focus on goals other than maximizing employment and output, wouldn't the bank be able to invoke the political rhetoric of protecting the bank's "independence" and the impact on public "confidence" if that independence is threatened to prevent the Chancellor from taking the actions you suggest?<br /><br />Finally, I don't think based on past experience that we can rely on the "current monetary framework" being threatened by actual events which disprove its underlying precepts. The 2008 crisis provided a test for whether economic policy frameworks can "survive" being proven wrong by real world tests rather than theoretical attacks by academics. And you have written persuasively about how "media-macro" has survived, even thrived, the test from reality. These frameworks don't exist simply because they are "correct". They exist because they empower and benefit certain powerful groups which have a vested interest in continuing the existence of the frameworks regardless of how they actually fare in reality.bbkhttps://www.blogger.com/profile/01099727870255840001noreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-57272001656156793832019-06-14T13:48:50.802+00:002019-06-14T13:48:50.802+00:00The kalecki line to fiscal first macro nautics as ...The kalecki line to fiscal first macro nautics as I'm sure we all remember<br />Is a class based rationale <br /><br />The confidence of the capitalist class mediates firm spending<br /> from credit sources <br />One can add discussion of rate elasticity of firm spending etc <br /><br />Cult cliques like MMT <br />Are metaphoric when defending their notion of best practices <br /><br />Don't mean those practices are <br />Wrong<br /> Anymore then practices guided by conventional analogies <br />Like belt tightening <br /><br />Ideology craves reasons bigger then the facts Owen Painehttps://www.blogger.com/profile/13675803406994867138noreply@blogger.com