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Stephanie Kelton
@StephanieKelton
, 4 tweets, 2 min read Read on Twitter
"Central banks were created to deal with financial matters (government finance or financial stability), not to fine-tune the economy...an interest rate rule that sets the policy rate at zero permanently is argued to be optimal." via @tymoignee boeckler.de/pdf/v_2008_10_…
Here's @stf18 in slideshow format walking through the rationale for permanent ZIRP. (I'd forgotten others had dubbed it the "Kansas City Rule." researchgate.net/publication/27…
click to Download .pdf
Interest and inflation. @wbmosler on what he's calling "the terms structure of prices."
In case you're interested in the slides that were not visible in the video. docs.google.com/presentation/d…
h/t @stf18
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More from @StephanieKelton see all

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Stephanie Kelton
@StephanieKelton
For anyone who thinks there’s no difference between MMT and conventional Keynesian theory.
Keynesian: Finite pool of money, loanable funds theory of interest, crowding out, etc.
MMT: Deficits are self-financing, deficits push rates DOWN, deficits RAISE private savings
None of this is “conditional” on being in a “depressed economy.” It’s just where you end up when you get the monetary operations right.
The *core* strength of MMT is without a doubt its superior understanding of monetary operations. And that is a debt we all owe to @wbmosler for his careful tutelage in the early years.
Read 6 tweets
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Stephanie Kelton
@StephanieKelton
The entire point of MMT/Functional Finance is to balance the risks of accelerating inflation against the benefits of full employment. It is about analyzing resource constraints (ex ante) and *avoiding* stimulus beyond those limits.
The budgeting process itself must take into account capacity constraints. If you're writing about MMT and complaining it will be hard to raise taxes to fight *ex post* inflation, you're assuming into existence a problem that MMT/Functional Finance explicitly combats *ex ante*.
There are plenty of ways to tackle inflation, should it accelerate, but you also have to know what's driving it. You can't just assume that the source of any future inflation problem will be the result of excessive budget deficits.
Read 5 tweets
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Stephanie Kelton
@StephanieKelton
There are other ways to argue for higher marginal tax rates on the 16k or so wealthiest Americans. One that isn't about "maximizing revenue." vox.com/policy-and-pol…
This is one way
Another is to say, “OK, one’s ecological footprint is mostly determined by one’s wealth, so we are going to tax the rich as part of a multi-pronged approach to dealing with climate change." So it's not about "raising revenue" but impacting behavior/outcomes.
Read 3 tweets

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Stu Cvrk
@STUinSD
Thread: The Dow Jumps BIGLY on Wednesday

1. <quote>
Stocks rose sharply on Wednesday, Nov. 28, after Federal Reserve Chairman Jerome Powell said interest rates were "just below the broad range of estimates of the level that would be neutral for the economy."
2. Prior to Powell's appearance, Donald Trump criticized him and the Fed in an interview with the Washington Post in which he accused the central bank of pushing U.S. stocks lower and triggering a decision by General Motors Co. ….
2A. to shutter five plants in North America and two additional plants outside of North America, and cut 15% of its salaried workforce.
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Alex Krüger 🇦🇷
@Crypto_Macro
1/ The @Nouriel's senate testimony has attracted lots of attention. His written testimony was an extremely thorough and hostile overview of crypto. Here's a summary in bullet points, with each bullet followed by my thoughts i.e. agreement or rebuttal. Bear in mind I'm a bullbear.
2/
- "Bitcoin and other cryptocurrencies represent the mother of all bubbles" ✅❌ => represented.

- "Scammers, swindlers, criminals, charlatans, insider whales & carnival barkers (all conflicted insiders) tapped into clueless retail investors’ FOMO and took them for a ride" ✅
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- "81% of all ICOs were scams in the first place, 11% of them are dead
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OW
@OccupyWisdom
“SINCE...........2008”

A THOROUGH COMPENDIUM OF #FINANCIAL #ECONOMIC #DEBT #STOCKMARKET #INTERESTRATE #HOUSING #RISK DATA, TOLD IN TWEETS BY MYSELF & MANY OTHERS.

This is dedicated to everyone that will say “nobody saw it coming”

Read the ENTIRE THREAD, down the rabbit hole
#GOLD #SILVER RATIO HIGHEST SINCE 10/2008
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Chris Ferris
@ChrisFerris3
@tutor2uEcon @lindayueh /1 A central bank is in no way equipped to directly drive the factors of economic growth. The influential factors for economic growth are: Fiscal policy: tax policy (tax rates & savings, the mix of taxes & Marginal Effective Tax Rates on investment in particular). Labour policy:
@tutor2uEcon @lindayueh 2/ Labour policy (education, training, retraining; and other factors related to enabling people to ups kill and learn about better paying jobs they can be productive in). Related to this is education & training systems to help get that training available. Also R&D: private ...
@tutor2uEcon @lindayueh 3/ R&D: private and public sector development of ideas at some point into goods and services saleable to the world. policy affects this as well for good or ill. Also trade policy affects growth by enabling the purchasing/sale of goods and services. Also investment policy ...
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Brendan Bernstein
@BMBernstein
Many claim that the BTC bubble has burst. BTC isn't a bubble --it's a response to the very real bubbles in our economy today.

Govt control of money and the most important price in a capitalist economy--the interest rate--has caused distortions and true bubbles. Let's take a look
1. Since the 1970s we've been progressing through a long term debt cycle. Both federal and private debt have skyrocketed from 140% of GDP in 1970 to 367% in 2009 and even higher today.
2. This has been driven by a longer term reduction in interest rates. The fed funds rate has decreased from 17.5% in the 1970s to near 0 post 2009. This isn't due to natural market forces but fed direction. It's just starting to now rise for the first time (good luck Powell).
Read 22 tweets
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Jo Michell
@JoMicheII
This is probably against my best interest, but it's Friday afternoon. So, inspired by @ericlonners and @Undercoverhist -- and with no responsibility for errors...
one like = one theory of the rate of interest.
1. Aristotle: "And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of all modes of getting wealth this is the most unnatural."
Read 69 tweets

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