Showing posts from November, 2018

A poignant Remembrance

On Remembrance Sunday, we remember those who died in war. Particularly the First World War, but also those who gave their lives fighting in subsequent wars. This year, I sang at two remembrance services in which all the music was written by people who either died in war themselves or had relatives who died. The poems of Wilfred Owen, who died one week before Armistice in November 1918, brought home poignantly to us the "pity of war".

Perhaps one day we will also honour those who did not fight but still lost their lives, and all those whose lives were ruined by war - the parents desperately trying to find out what happened to their children, the wives left to bring up children on their own, the soldiers whose mental and physical health was ruined, the villagers and townspeople whose homes and livelihoods were wiped out, the thousands of women raped. And perhaps one day we will end the jingoism that disfigures many of our remembrance services. There is nothing to celebrate a…

Some governments really are like households

In my last post, I said that the fact that a government can buy anything that is for sale in its own currency is not sufficient to confer monetary sovereignty. A country which is dependent on essential imports, such as foodstuffs and oil, for which it must pay in dollars is not monetarily sovereign. Some people disputed this on the grounds that such a country could earn the dollars it needs through exports. So I thought I would write a post discussing how realistic this is in practice.

Strictly speaking, the only country in the world that can always pay for everything it needs in its own currency is the United States. However, most developed  countries that issue their own currencies have deep and liquid FX markets that enable them to exchange their currencies freely for other currencies; many also have swap lines with the Federal Reserve. Eurozone countries don't issue their own currencies, but the bloc as a whole issues the world's second reserve currency. It is not going t…

Now state pension ages are equalised, let's fix the real problems



That said, the rise…

The myth of monetary sovereignty

How many countries can really claim to have full monetary sovereignty?
This is a more complex definition from a prominent MMT economist:
1. Issues its own currency exclusively
4. Its central bank sets the interest rate
5. The currency floats

