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1/7
I've just finished reading Stefan Link’s excellent new book. It probably isn’t for everyone, but there is an awful lot here to think about for those trying to understand the Chinese growth model and its predecessors. Among other things the book shows that many of the key...
I've just finished reading Stefan Link’s excellent new book. It probably isn’t for everyone, but there is an awful lot here to think about for those trying to understand the Chinese growth model and its predecessors. Among other things the book shows that many of the key...
2/7
insights of MMT were actually well-understood by some as far back as the 1920s and 1930s. For example, in 1921 Henry Ford and Thomas Edison proposed that the government fund a major investment project at Muscle Shoals not by issuing bonds but by issuing currency, arguing...
insights of MMT were actually well-understood by some as far back as the 1920s and 1930s. For example, in 1921 Henry Ford and Thomas Edison proposed that the government fund a major investment project at Muscle Shoals not by issuing bonds but by issuing currency, arguing...
3/7
that “if the Nation can issue a dollar bond, it can issue a dollar bill.” They argued that the value of the currency would be supported by the real earnings generated by the dam.
Two years later a German government official, worried that reparations were pushing Germany...
that “if the Nation can issue a dollar bond, it can issue a dollar bill.” They argued that the value of the currency would be supported by the real earnings generated by the dam.
Two years later a German government official, worried that reparations were pushing Germany...
4/7
into permanent indebtedness which would create a drain on German resources, wrote that “money is what the state declares it to be”, and argued for “productive credit creation” in which investment would be financed by interest-free “construction bills” (a lot like currency).
into permanent indebtedness which would create a drain on German resources, wrote that “money is what the state declares it to be”, and argued for “productive credit creation” in which investment would be financed by interest-free “construction bills” (a lot like currency).
5/7
In both cases the argument is that money creation used to finance activity that results in an equivalent increase in productive capacity doesn’t undermine the value of money (except perhaps, I would argue, temporarily, before the project begins...
In both cases the argument is that money creation used to finance activity that results in an equivalent increase in productive capacity doesn’t undermine the value of money (except perhaps, I would argue, temporarily, before the project begins...
6/7
to generate real economic value). While money creation certainly increases demand, this isn’t inflationary if it also increases supply. Borrowing, on the other hand, transfers a part of the wealth creation to financiers, none of whom had any role in creating the project.
to generate real economic value). While money creation certainly increases demand, this isn’t inflationary if it also increases supply. Borrowing, on the other hand, transfers a part of the wealth creation to financiers, none of whom had any role in creating the project.
7/7
It seems that many on both the radical left and the radical right wanted to fund government-backed investment with money creation in part to prevent the benefits of greater economic activity from contributing to income inequality.
It seems that many on both the radical left and the radical right wanted to fund government-backed investment with money creation in part to prevent the benefits of greater economic activity from contributing to income inequality.
