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Daniela Gabor Profile picture
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29 Sep, 5 tweets, 2 min read
this paper is much more interesting in how it portrays mainstream macrofinance rather than its critique of MMT.
first, Quantity Theory of Money is, to cite Charles Goodhart, weak lark, imposing a monetarist causality on an identity.
holding that against MMT is not a serious intellectual effort. Image
fair enough, they recognize money multiplier (critical to QTM/monetarism) is nonsense Image
the 'Latin America disproves MMT' line papers over political economy issues that are not reducible to monetary financing - like the Allende years in Chile, Argentina post 2000 crisis etc. Image
but what if governments suffer from 'rational inattention', the most recent agent affliction in mainstream macro? Image

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More from @DanielaGabor

Daniela Gabor Profile picture
1 Oct
let's all remember that a wage-price spiral only occurs if
firms dump wage increases into prices, instead of reducing their profits.

German workers here are asking for some share of that nice profit pie earned during pandemic.
I am also puzzled by the collective terror of worker power, only a couple of months ago central bankers and IMF chief economists were clamouring for exactly that.
workers of the world unite, just a bit below the inflation target?
Read 4 tweets
Daniela Gabor Profile picture
28 Sep
exciting panel on inflation panel at Sintra, with @Isabel_Schnabel chairing.
Charles Goodhart: we are in an extraordinary moment, we dont have a general theory of inflation.
we used to have two - monetarist and Phillips Curve - but none has performed well.
we also have the expectations theory of inflation - but that doesnt work either, since inflationary expectations are backwards looking and adaptive Image
Read 22 tweets
Daniela Gabor Profile picture
22 Sep
fascinating WEF conversation on private equity as the new climate warriors:

- PE increasingly home for high carbon assets as less regulatory scrutiny and disclosure requirements
one bold claim: PE business model can reduce carbon footprint

PE make money on way out, when they sell companies to another party

if PE inherits a certain ESG/carbon footprint, if it can reduce it in 5 years time, it can create value.

ergo, PE ultimate climate warriors.
of course, 'value' is keyword, and claims that PE will have to green their companies because there are reputational costs are nonsense - Blackstone shrugged off @leilanifarha critique of their practices as institutional landlords
Read 6 tweets
Daniela Gabor Profile picture
22 Sep
the natural gas crisis in UK is a stark reminder that corporate farming makes us vulnerable and that the low-carbon transition cant be driven by them

ft.com/content/475ca5…
unfortunately, UN remains captured by agri-business

'70% of world’s population is fed by diverse network of small-scale producers and peasants - this group uses less than 25 percent of resources necessary in agricultural production.
industrial food chain feeds only 30% of world, while using over 75 percent of resources'
Read 4 tweets
Daniela Gabor Profile picture
21 Sep
Amazingly, ECB has found (roughly) 40 economists to co-author and agree on fiscal-monetary interactions
reference list for the monfiscal paper doesnt bode well: two Cochrane, zero @BCoeure (2016), the most insightful ECB speech on the topic ever.

ecb.europa.eu/press/key/date…
oh, feels like 2007, when we worshiped at the altar of DSGE models.

maybe I should have said ECB found 40 DSGE economists that agree on fiscal-monetary interaction.
Read 4 tweets
Daniela Gabor Profile picture
21 Sep
when fiscal hawks at BIS randomly choose 1995 as year of 'look how much we'd pay in debt service' counterfactual but make no reference to imperative of green public investment

bis.org/speeches/sp210…
after 15 months of close fiscal-monetary coordination, if fiscal hawks want to make a theoretical case for austerity, they need to do better than 'instability trap'.
Hawkish Alice in Fiscalaland: when you claim that central bank purchases of government debt are actually bad for fiscal position, despite the graph on previous page demonstrating the contrary.
Read 5 tweets

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