Central bank independence was adopted throughout Europe with the Bundesbank as the model, to emulate Germany's low inflation. But to what extent was Germany's low inflation due to monetary policy? And to what extent was German monetary policy replicable by other countries?

1/6 According to Jeremy Leaman, Germany's low inflation rate was mainly caused by structural factors unrelated to monetary policy; and monetary policy - exchange rate policy, really - was mainly effective because of the relative strength of the D-mark.

2/6

tandfonline.com/doi/abs/10.108…

1. 1990-talet präglades av en djup hopplöshet inför politikens möjligheter. Obevekliga krafter ansågs göra allt annat än en anpassning till en nyliberal samhällsmodell lönlöst.

Tråd 🧵🧵🧵 2.Krisen sågs som ett bevis på att vi hade levt över våra tillgångar. Inte bara yuppie-erans spekulationsbubbla ansågs ohållbar utan även den tidens stora välfärdsstat.

How do you maintain full employment without inflation?

1. The traditional Swedish model combined macro policy with active labor market policy and other selective measures to smooth investment and maintain employment throughout the business cycle.

Thread 🧵 2. Using macro policy alone to control employment and inflation is obviously very dumb, so it needs to be augmented with targeted policies in both booms and slumps.

Det som @Isabel_Schnabel nämner här, att den europeiska skuldkrisen avslutades på ett ögonblick med några ord från centralbankschefen, är det ingen i den svenska offentligheten som känner till - eller vill erkänna - varken finansministrar eller ledande nationalekonomer.

https://twitter.com/ecb/status/1536761008743645184

Här är Lars Calmfors, som när han skriver om eurokrisen ändå inte nämner det med ett ord, trots att det är helt avgörande för det han beskriver.

Det som spelar roll för statsfinansiell stabilitet är inte statsskuldens storlek utan om man har en centralbank som sköter sitt jobb.

Thread on Harrison White’s theory of production markets, as explained by Reza Azarian (2003). 🧵 Harrison White argues that while mainstream economics has a theory of exchange markets, it doesn’t have a theory of production markets, nor is it capable of developing one.

The Swedish ”Stockholm School” of economics developed ideas similar to those of Keynes in the 1930s.

This book comprises a set of lectures on the topic by one of the school’s leading figures, Erik Lundberg, held at the Bocconi University in Milan in 1981.

Thread 🧵 The Stockholm School took form in response to the Great Depression, uniting liberal and socialist economists behind the goal of economic recovery. They found a willing partner in the Social Democratic government

Verkligen pinsamt låg nivå på S-ledningens försvar av det finanspolitiska ramverket. Utgår helt från att statsbudgeten är som en hushållsbudget, utlämnad åt marknadens nycker. Här skriver de att en växande statsskuld är en börda för kommande generationer.

Om något är det en gåva då den innebär fler finansiella tillgångar.

Eftersom @danielswedin efterlyste en replik på svångremspolitikens försvarare @boelgodner, @DanielFarm och @JensSjostrom och deras senaste artikel i @DagensArena kommer här en mini-tråd av debattartiklar jag har skrivit i ämnet 🧵

dagensarena.se/opinion/den-ek… svd.se/osund-fixering…

Den här artikeln av @carljohan_vs från 2019 är viktig, för den visar hur invandrare får jobb, inte med hjälp av riktade insatser, utan helt enkelt för att efterfrågan höjs.

1/13

dn.se/ekonomi/carl-j… Det är mycket tal om att invandrare inte får jobb för att de saknar de egenskaper som krävs: språkkunskaper, utbildning, socialt kapital, osv.

2/13

My ideas weren’t wrong, it’s just that the structure of the universe has changed When it turned that everything the Economist had preached about macroeconomics was wrong, they had an issue about the world economy’s ”strange new rules”

Här ger Bo Becker, vars @DNDebatt-inlägg om gröna investeringar jag och @erikjrvla replikerade på, en mer utförlig bild av sin syn.

Med reservation för att det var en del oväsen i bakgrunden medan jag lyssnade kommer här en del svar på hans poänger 1/7

Becker säger att pensionsfonders klimatinvesteringar inte är ett särskilt effektiv verktyg för omställning eftersom det bara hjälper företag som behöver externt kapital.

Men det är ju just de som behövs - nya företag som kommer utifrån och inte har tjänat ihop kapital från

Still surprised that Larry Summers said that the central bank can’t control inflation by raising rates without doing more harm than good.

He’s not wrong, but that’s the very centerpiece of the NK paradigm he and his colleagues have been pushing the past 40 years out the window He did leave one possible escape clause open though—that it could work if the government was committed to austerity.

Fascinating component of Sweden's turn toward neoliberalism: during the 1970s, the Riksbank had allegedly been exaggerating balance of payments statistics to make fiscal retrenchment seem necessary.

archive.riksbank.se/Upload/Dokumen… Much like the Cambridge capital controversy, there appears to be no disagreement that the statistics were in fact grossly misleading, and that the economist who pointed them out, Sven Grassman, was right; but he was ostracized and the profession and policy went on like before.

It’s worth noting that the whole nonsense about the discount rate that gripped the climate debate around the time of the Stern Review, & indeed largely *was* the climate debate, would’ve been avoided if ppl had been inoculated by MMT, where the interest rate is a policy variable

https://twitter.com/drvox/status/1282050449193889793

and what mattered to evaluate public investment was real and not financial costs and benefits.

I think the crude Marxist conception of class expressed here by ⁦@CJFDillow⁩ would benefit from being complemented by the Weberian concept of status groups. 1/n stumblingandmumbling.typepad.com/stumbling_and_… Saying that implementing MMT ”requires more than an intellectual (counter-)revolution. It requires a dismantling of capitalist power. And that's a tougher job,” as if ideology and class power were two separate things doesn’t make much sense to me. 2/n

I have a new article out in Industrial and Corporate Change, where I make the case that ”soft budget constraints” can be good for innovation.

academic.oup.com/icc/advance-ar… This runs counter to main thrust of Kornai’s theory, where the soft budget constraint is considered a prime cause of technological stagnation in socialist economies (including hybrid economies such as China’s), as well as the way the concept is used by his many followers.

@JWMason1 @_gabriel_U @NathanTankus @nina_econ @laurimyllyvirta @iwelsh @BJMbraun @adam_tooze Sadly no. I can see if I can find som nuggets to translate @JWMason1 @_gabriel_U @NathanTankus @nina_econ @laurimyllyvirta @iwelsh @BJMbraun @adam_tooze To first thing to greet the reader is, naturally, a household analogy.

”My strong aversion to debt comes from my parents. ’You don’t go shopping until you’ve got money in your hand,’ my mother Karin used to say.”

It seems like the EU might be turning a corner on climate policy. There’s talk of a new mandate for the EIB and possibly even the ECB, and an initiative in the battery industry shows what may be a move toward EU-wide low carbon industrial policy. ft.com/content/140e56… ”The new battery factory is one of the first steps in a big shift in the way that Europe thinks about how to develop new industries as it tries to deal with competition from China and the US.”

ft.com/content/140e56…

One of the deepest effects of neoliberalism, I think, is how thoroughly it has tarnished the concept of economic planning. Try advocating five-year plans and you’d be called a tankie, despite it (or something similar) being obviously needed to combat climate change. Five year plans (or four, or six) used to be commonplace in capitalism but are now beyond the pale. The only exception is China, a country neoliberals like to claim as their own, but it wouldn’t have grown rich without the planning (or the capitalism, of course).

There is a strain within fiscal sociology, perhaps even its dominant one, that depicts the capitalist state as "structurally poor," with the implication that if socialists were to seize it, it wouldn't make much of a difference.

Here is Goldschied (1958): Other examples include Offe's "The fiscal crisis of the state" (1973), and Wolfgang Streeck's "Re-Forming Capitalism" (2009). It's a fundamentally pessimistic view, holding that social democracy will undermine itself unless it achieves a complete break with capitalist relations