Will Debt Derail Abenomics?

It seems to me that one of the automatic, if not always intended, consequences of Abenomics is to force up Japan’s current account surplus, and in fact to force it up substantially. This will have to do at least in part with deciding how to manage the country’s enormous government debt burden, which easily exceeds […]

Economic Bloggers See Modest Growth, Modest Risk Ahead for U.S.

We welcome the return of the Survey of Leading Economic Bloggers. Tim Kane spearheaded the survey during his Kauffman Foundation tenure. Tim has moved to the Hudson Institute, where he has busily been writing books [with important policy implications according to this NYT review – the OldProf has this on the reading list, but is still catching up], and […]

Who Cares About the National Debt?

Not Greg Mankiw. Or, to be precise, not “Republicans.” This past weekend Mankiw wrote a column for the Times laying out the arguments for a carbon tax. They are so well known and so obviously correct that I won’t bother repeating them. (A tradable permit system could work equally well, depending on how it is designed.) In addition, […]

Bond Vigilantes and Math Sustainability of Fiscal Deficits

(Part 1): Does Sovereign Government Set Its Own Interest Rates? Last week we began our series exploring where MMT parts company with “Keynesian” macroeconomics. This is a response to Ed Dolan’s useful post here: http://www.economonitor.com/dolanecon/2012/11/28/what-does-it-mean-for-fiscal-policy-to-be-sustainable-mmt-and-other-perspectives/ Let me just very quickly recount our conclusions on the first two definitions of sustainability that Ed posed: Is MMT […]

IMF Austerity Mea Culpa?

A number of folks are looking at the latest IMF paper (here) as a startling admission of the failure of Austerity: “Consider it a mea culpa submerged in a deep pool of calculus and regression analysis: The International Monetary Fund’s top economist today acknowledged that the fund blew its forecasts for Greece and other European […]

How Do We Measure Debt?

In the last issue of my newsletter much of the first half was dedicated to a discussion of recent events in Spain and Italy and why they reinforce the argument that several countries will be forced to leave the euro and restructure their debt.  The most worrying, but expected, fact was the amount of capital […]