By: Andrea Terzi
The August 2011 Monthly Bulletin of the European Central Bank has an interesting chart of financial balances of different sectors in the euro area. The chart is reproduced below.
The figure shows how rising deficits in Europe in 2008 and 2009 have produced higher net financial savings in the private sector. Read the rest of this entry »
By: Andrea Terzi
Assets and liabilities
In a double entry ledger book, debits reflect acquisitions of value and credits reflect releases of value. This information offers a source for preparing some key documents that show how the activities of giving and receiving shape monetary values.
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The following is Part Two of an interview with Randy Wray on the Global Crisis and the extent of the possibility of another crisis. It was conducted by students Inigo Garcia, Fahd Arnouk, and James Jasper, at Franklin College Switzerland for Mecpoc. (4 May 2011)
By: Andrea Terzi
Double-entry bookkeeping
A double-entry bookkeeping account is a technique of documenting records of economic transactions made by an economic entity (such as a household, a business enterprise, a nonprofit institution, a government). Its raw form is a ledger that records, in time sequence and for a specified time period, the value of all transactions expressed in a common unit of account. It is called “double-entry” because every transaction is recorded twice: once as a debit and once as a credit. Read the rest of this entry »
Imagine a card game, where every entity in the economy is one of the players,
and you, Congress, are the scorekeeper.
The message here is the difference between being the scorekeeper and being a player.
The problem is, you are acting like one of the players when, in fact, you are the scorekeeper.
Read the rest of this entry »
We are often told that the Fed prints money, while the Treasury can only borrow. Yet, this statement is inaccurate.
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On a weekly basis, Randy Wray is posting pieces on New Economic Perspectives that gradually build toward a comprehensive understanding of Modern Monetary Theory. MMT describes how a monetary system works, assuming an economy where the government is the monopoly issuer of money, i.e., taxes can only be paid in the state currency, and government offers no fixed-rate conversion commitment to any real or financial asset.
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- Tags: MMT, Understanding money, Wray
By: Andrea Terzi
Value transfer systems in contemporary societies
One chief reason why human societies differ from each other is because of the different ways in which they combine diverse means of transferring value. Read the rest of this entry »
The following is Part One of an interview with Randy Wray on the Global Crisis and the extent of the possibility of another crisis. It was conducted by students Inigo Garcia, Fahd Arnouk, and James Jasper, at Franklin College Switzerland for Mecpoc. (4 May 2011)
By: Andrea Terzi
Money in a monetary economy
A monetary economy is an economy in which items that people consider valuable are transferred through contractual arrangements, and thus real claims and real liabilities have monetary counterparts that can be ultimately settled only by delivery of a monetary claim on the sovereign state. This substantially differs from an economy where people give and receive real values either with no direct, well-defined counterpart or with a collective system of real settlement. Read the rest of this entry »
- Tobin Tax Monster
- The crisis and the blogosphere have opened mainstream economics up to new attack
- Not only in Germany: The ECB now wants export-driven growth for whole Europe!
- QE Euro-style: There is no alternative to the ECB writing the check
- Warren Mosler’s proposals for the 99%
- 12. Income statement and net income
- Solutions to the euro crisis
- Does this sound familiar?
- The speech by President Barack Obama we have been waiting for! (Ghost written by Warren Mosler)
- 2011 Mecpoc lecture
- Does the ECB understand sector financial balances?
- 11. Balance sheet and net worth
- Interview with Randy Wray, Regarding the Next Crisis (Part 2)
- 10. Accounting for debits and credits
- Congress: You Are the Scorekeepers for the U.S. Dollar, Not a Player!
- Who can really ‘print’ money? The Fed or the Treasury?
- Randy Wray’s Modern Money Primer
- 9. A paradigm for understanding monetary economies
- Interview with Randy Wray, Regarding the Next Crisis
- 8. What monetary economics is about
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