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Here is summary of my most recent paper published last june:
1- monetary sovereignty: government issues an inconvertible currency, sets monetary laws, imposes dues to be paid with the national currency, taxes in national currency, issues public debt set in the national currency https://twitter.com/tymoignee/status/1273240160226795520
1- monetary sovereignty: government issues an inconvertible currency, sets monetary laws, imposes dues to be paid with the national currency, taxes in national currency, issues public debt set in the national currency https://twitter.com/tymoignee/status/1273240160226795520
2- implementation of mon sovereignty: fiscal and monetary authorities work together to ensure that fiscal and monetary policy work smoothly: budget is implemented, interest rates are stable, taxes are collected
3- implications:
A) public debt is managed to achieve broad macroeconomic goals. These goals are distinct from budgetary goals: issued treasuries during fiscal surplus, choosing to issue treasuries that a higher rate
A) public debt is managed to achieve broad macroeconomic goals. These goals are distinct from budgetary goals: issued treasuries during fiscal surplus, choosing to issue treasuries that a higher rate
B) theoretical implication: the supply of gov securities is horizontal at a policy determined rate. That complements the horizontal supply of reserves. Put differently, gov supplies securities at the request of financial market participants, at a rate it determines
C) monetary sovereignty provides one degree of freedom in tight macro accounting constraints: fiscal deficits are the norm and are sustainable as long as monetary sovereignty prevails. They reflect other sectors willingness to be in surplus.
D) austerity policy are self defeating unless other economic sectors are willing to deficit spend. Usually not the case so automatic stabilizers will bring fiscal position back into a deficit
