Tuesday, 18 February 2014

Debt and Growth: Is There a Magic Threshold?

New study from the IMF guys refutes Reinhart & Rogoff, finds no impact of debt on growth, no threshold effect. The paper's here:http://www.imf.org/external/pubs/cat/longres.aspx?sk=41352

The findings aren't surprising from an MMT point o view. For the notion of tax-driven money is not new. Many folk wrote about it, including Adam Smith, Jean-Baptiste Say, John Stuart Mill, Karl Marx, John C. Calhoun(US senator and vicepresident), Lerner, Keynes, William Stanley Jevons etc.

It's like Abba Lerner's conclusion on debt, the purpose of bond sales for a currency issuer isn’t “financing” but rather a decision that the public should hold bonds rather than reserve balances earning interest (i.e. IOR).

Also, Thomas Edison asked a question in his days. He asked, why must the government issue bonds to fatten bankers with interest? When the government can issue debt free currency which helps the workers.http://prosperityuk.com/2000/09/thomas-edison-on-government-created-debt-free-money/

No comments:

Post a Comment