The Weekend Quiz – March 12-13, 2022 – answers and discussion

Here are the answers with discussion for this Weekend’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.

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Participation in our MMTed edX MOOC – gender, education and geographic breakdown

Today’s blog post is a little different. Yesterday, the second running of our MMTed edX MOOC – Modern Monetary Theory: Economics for the 21st Century – came to an end after running for the last 4-weeks. This is a free course developed by the University of Newcastle and – MMTed – which provides an introduction to Modern Monetary Theory (MMT). The course is self-paced and contains a range of learning materials (videos, text, discussion forums, assignments, exercises, games, etc). After two years of offering, I thought you might like to see some statistics that relate to who participated in the course broken down by gender, educational background and geography. I have more data than I present today which I am examining as a way of understanding patterns of behaviour. We will use this data to improve our MMTed course offerings, as our funding base permits.

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Prospective future Labor Prime Minister wants to channel those who cut real wages, privatise and extol neoliberalism

It’s Wednesday, and I am flat out today on a range of things including two live events to finish of the edX MOOC we have been running over the last 4 weeks. These sessions go for around 90 minutes each and have given the participants from all over the world a chance to discuss things about Modern Monetary Theory (MMT) and clarify uncertainties etc. It also helps me find out what beguiles those who come into the material for the first time. So it works to benefit both ways. Today, I am sad that the Australian Labor Party federal leader, who is in the box seat to become the next Prime Minister in May this year has just announced his model is a past Labor prime minister (Hawke) who turned out to be a US corporate spy acting against the labour movement when he was President of the Australian Council of Trade Unions (the peak body) and who fast-tracked neoliberalism in Australia during the 1980s. His other model apparently is John Howard, the conservative prime minister from 1996 to 2007, who accelerate that neoliberalism, locked up refugees on remote islands indefinitely (some are still there), turned against the unions, turned against the unemployed, and oversaw the explosion of household debt while his government ran surpluses and crippled public infrastructure and services. What gives? And the music today had to be an antidote to the anger that the Labor leader’s revelations today have engendered. And a tiny thought on Russia.

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Contrary to what you may have heard – governments can always reduce poverty if they choose to

For years, students have been taught that fiscal policy is an ineffective policy tool to regulate fluctuations in national income derived from changes in spending and saving decisions in the non-government sector. This narrative justified the austerity purges that we have become accustomed to pre-pandemic. The elevation of the fiscal surplus to some desired goal has been instilled in our minds and we have voted to support governments that record these surpluses because we have thought they were being fiscally responsible. The GFC, and, more recently, the pandemic has helped undermine that narrative as people have realised that the only thing between them and hunger has been government spending. The ‘market’ hasn’t helped them. The evidence that government spending has reduced poverty and created opportunities for families that were not previously possible is strong. One such measure is the – Supplemental Poverty Measure (SPM) – which was first published by the US Census Bureau in 2011. This blog post records my notes on that data release.

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US labour market improves but slack still remains with no wage pressures emerging

Last Friday (March 4, 2022), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – February 2022 – which reported a total payroll employment rise of only 678,000 jobs and a rise in the participation rate. Fortunately, employment growth was strong enough to drive the unemployment rate down by 0.2 points to 3.8 per cent. The US labour market is still 2,105 thousand jobs short from where it was at the end of February 2020, which helps to explain why there are no wage pressures emerging. Real wages continued to decline. Any analyst who is claiming the US economy is close to full employment hasn’t looked at the data.

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The Weekend Quiz – March 5-6, 2022 – answers and discussion

Here are the answers with discussion for this Weekend’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.

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The Weekend Quiz – March 5-6, 2022

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

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Vast majority of NZ economists seem to support MMT

Yesterday, I published a full analysis of the national account release in Australia, so today I am pretending it is my Wednesday ‘news’ blog with the music segment that seems to be popular. The news is all floods in Australia, death and destruction in the Ukraine and big talk (about 2 or more decades too late) from the Western governments. I note that the German government has confiscated a luxury yacht owned by some Russian ‘oligarch’ (don’t you just love their terminology) while stacks of other oligarch yachts are heading or are in the Maldives to avoid such a fate. Stupid question: if these oligarchs are so bad and their fortunes ill-gotten why have we waited so long to do something? Today we talk briefly about the resolve of the RBA to resist the gambling addiction of speculators in the financial markets. We also consider a discovery I made last week that top New Zealand economists seem to support Modern Monetary Theory (MMT), and then if that isn’t enough – some music.

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Australian national accounts – growth rebound

Today (March 2, 2022), the Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, December 2021 – which shows that the Australian economy reversed the contraction in the September-quarter 2021 and posted an annual growth rate of 4.2 per cent. Covid lockdowns and restrictions caused the contraction and their abandonment allowed for growth to return. Growth was driven by strong growth in household consumption expenditure as public fiscal support declined and private investment expenditure went backwards. The change in the terms of trade was negative reflecting the rising import prices as supply constraints continue and demand rises. Overall, a good result but the next quarter will be much less robust (floods etc).

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