A Straitjacket to Help Brazil Fight Fiscal Obesity

A Straitjacket to Help Brazil Fight Fiscal Obesity

Brazil’s GDP contraction since mid-2014 has multiple non-fiscal roots – Canuto (2016a; 2014) – but it has morphed into an unsustainable fiscal trajectory (Canuto, 2016b). Dealing with the latter has become a precondition for full economic recovery and the Brazilian government has submitted to Congress a constitutional amendment bill mandating a public spending cap for […]

Yes, Paul, Banks Do Create Money; and Bill does TED!

Readers know that MMT-ers and Minskyans drive Paul Krugman crazy by insisting that banks really do “create money out of thin air”, and that his “deposit multiplier” story has got it all wrong. See my last post on that here: http://www.economonitor.com/lrwray/2014/02/19/minsky-on-banking-early-work-and-critiques-by-krugman-and-horizontalists-revisited/. The Bank of England has just released a series of papers that are more-or-less on […]

Recovery Still Policy-Led, Political Risks on the Rise, EMs Under Pressure

Five years into the crisis, the global recovery remains supported by policies[1]. In 2014, monetary policy will remain accommodative, to facilitate the healing of the financial system and private sector deleveraging. While the Federal Reserve (Fed) will gradually reduce quantitative easing (QE), the European Central Bank (ECB) and the Bank of Japan (BoJ) are likely […]