Here are the answers with discussion for yesterday’s quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime in 2013. Our (very incomplete) textbook homepage – Modern Monetary Theory and Practice – has draft chapters and contents etc in varying states of completion. Comments are always welcome. Note also that the text I post here is not intended to be a blog-style narrative but constitutes the drafting work I am doing – that is, the material posted will not represent the complete text. Further it will change as the drafting process evolves.
Today’s release of the – Labour Force data – for October 2013 by the Australian Bureau of Statistics confirms that the new government needs to substantially alter the macroeconomic policy settings in favour of stimulus to address the virtually zero employment growth and the upward trend in labour underutilisation. We learned today that employment growth remains around zero and full-time employment fell significantly. Unemployment also rose and the unemployment rate rose to 5.7 per cent. The actual extent of labour underutilisation is significantly higher than indicated by the unemployment rate, given that the participation rate is well down on its most recent peak and underemployment is rising. This data signals an urgent need for fiscal stimulus to reverse the negative trend. Unfortunately, with both sides of politics are locked into an austerity mindset the situation is likely to deteriorate further.
There was an article in the Atlantic yesterday (November 5, 2013) – How Washington Is Wrecking the Future, in 2 Charts – which reports in a related article in the UK Financial Times (November 3, 2013) – US public investment falls to lowest level since war. The essence of the articles is that the political landscape in the US has undermined the US President’s plans to spend more of public “infrastructure, science and education” which will undermine the future growth potential and prosperity of the US economy. A Bloomberg article (November 6, 2013) – Don’t Blame Congress for Cutbacks in Public Investment – criticised both analyses on the grounds that the cutbacks are relatively small and the culprit is state and local government in the US rather than the federal government. There is truth in both sides but neither really grasps the nettle and considers the cutbacks in government spending in the context of what is going on in the non-government sector. The cutbacks in public spending in the US over the last three years are unnecessary (financially) and the fiscal drag is keeping unemployment high and increasing the poverty rates.
I have been travelling a lot today (nearly 6 hours starting early) and so haven’t much time for blog writing. I am working on a paper at present on the use of metaphors in economics and how Modern Monetary Theory (MMT) might usefully frame its offering to overcome some of the obvious prejudices that prevent, what are basic concepts, penetrating the public psyche. Here are some notes on that theme. The blog is just a rough sketch and will be refined over the coming weeks. There is a section at the end that encourages reader feedback – lets see what you think.
In 1944, Swedish economist Gunnar Myrdal published his famous 1,500 page work – An American Dilemma: The Negro Problem and Modern Democracy, which documented the conflict in American society driven by what he called the “American Creed”, which is about the “ideals of equality and liberty” and the obvious “moral lag in the development of the nation”, which at the time was referred to as “the Negro problem”. More recently, a book by American academic Nancy DiTomaso – The American Non-Dilemma – challenges the earlier notion and argues that whites in America are able to exploit racial inequality without doing “bad things” to blacks. Both works are interesting, but the more recent work fits with my current research because it introduces a new conflict, albeit unwittingly, that centres on whether you reap the seeds you sow.
Here are the answers with discussion for yesterday’s quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of modern monetary theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.
Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.
I am now using Friday’s blog space to provide draft versions of the Modern Monetary Theory textbook that I am writing with my colleague and friend Randy Wray. We expect to publish the text sometime in 2013. Our (very incomplete) textbook homepage – Modern Monetary Theory and Practice – has draft chapters and contents etc in varying states of completion. Comments are always welcome. Note also that the text I post here is not intended to be a blog-style narrative but constitutes the drafting work I am doing – that is, the material posted will not represent the complete text. Further it will change as the drafting process evolves.