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By how much should the Bank of England increase interest rates in a traditional monetarist economy

Well it would if the ECB did it for everyone. But each country has its own fiscal system and its own national debt, so it is hard to imagine.

I ask, once again, has the MMT "formula" ever been used?
These questions have been answered many, many times before.
 
Since the root cause of the current inflation in the UK (and the whole of the rest of Europe too) is a war created and promoted by a bunch of gangsters to the East - please, someone, explain why monetarism is then the root of economic woes we are currently facing.

And please explain how or why an MMT economy could or would have avoided the 'problem'.
This has been covered already
Presumably a central tenet of MMT is the currency issuing freedom of the country - that must mean that the EU would not have the MMT option even if it were interested.
The EU does issue it’s own currency. Member states who adopt the Euro cannot
 
Since the root cause of the current inflation in the UK (and the whole of the rest of Europe too) is a war created and promoted by a bunch of gangsters to the East - please, someone, explain why monetarism is then the root of economic woes we are currently facing.

And please explain how or why an MMT economy could or would have avoided the 'problem'.

Switch your glance away from the monkey and onto the organ grinder. :)

The 'root cause' isn't what you assume, in itself. It is that we marketised and sold off our National Resource (oil and gas from the North Sea) in a way some other countries like Norway did NOT. If we'd kept National control rather that flogging off decades of extraction to international corporations we would still be 'selling the oil to ourselves' at essentialy the *production* cost. Not the 'world market price'.

That's where the 'conventional widom' (Monetarism creed of 'economics') shot us in the foot. Erm, apparently there was 'no alternative' although - actually in mere reality there was, and is.

Similarly, we have for decades now failed to use any of the profit we could get from selling the 'excess' (to our needs) on the World market... and then *investing* that in other sources - wind, water, whatever - to ensure we reduced our reliance on 'big fossil'. The point here is that successive Governments have simply relied on 'cheap fossil' and not actually acted for our future benefit. Because they assumed it for 'the market' to decide.
 
Switch your glance away from the monkey and onto the organ grinder. :)

The 'root cause' isn't what you assume, in itself. It is that we marketised and sold off our National Resource (oil and gas from the North Sea) in a way some other countries like Norway did NOT. If we'd kept National control rather that flogging off decades of extraction to international corporations we would still be 'selling the oil to ourselves' at essentialy the *production* cost. Not the 'world market price'.

That's where the 'conventional widom' (Monetarism creed of 'economics') shot us in the foot. Erm, apparently there was 'no alternative' although - actually in mere reality there was, and is.

Similarly, we have for decades now failed to use any of the profit we could get from selling the 'excess' (to our needs) on the World market... and then *investing* that in other sources - wind, water, whatever - to ensure we reduced our reliance on 'big fossil'. The point here is that successive Governments have simply relied on 'cheap fossil' and not actually acted for our future benefit. Because they assumed it for 'the market' to decide.

You do realise that this post implies that Thatcherites got it wrong and the Tories aren’t fiscally prudent.
 
You do realise that this post implies that Thatcherites got it wrong and the Tories aren’t fiscally prudent.

Gosh! That can't be right.... They are 'prudent' when it comes to them getting their snouts in the trough. cf kleptocracy, wealthy people/companies giving bungs and cosy consultantcies/directorships to Tory MPs, etc, etc. Just that they seem to assume this is good for us as well... or assume: "S*d You, I'm all Right." Nah. Cannae be true...

Alternative is, of course, them simply being delusional. The present 'race' on who we get as next PM seems to show quite a lot of that.
 
TBF There are some decent Tories. However the nature of their party and its overall creed and MO is that they tend not to float to the top. cf for example Rory forgotten-his-surname who was ex-military and stood against BloJo the last time they chose a ble... erm leader. Tories being Tories, he didn't get far. Instead we BloJo, Lord Snooty, Muppets, etc, in Government.

No surprise that they pick the 'economics' that suits them personally.
 
I ask, once again, has the MMT "formula" ever been used?

Maybe they have, but can you have a quick shot at answering now?
First of all please note how many times people have complained about MMT being “everywhere” but as here, it is not MMT supporters who keep raising it. Second, the OP has specifically asked that this thread is not used to discuss MMT and I have tried hard to abide by that request. Third this question has been answered already.

As you have asked so repeatedly, the answer is that we have MMT running here and now in the UK. MMT is the observation that government issues is own currency for spending. The problem is that monetarism determines that only money raised from tax can be used for spending, which is an obvious fiction.

Keynes said that ‘anything a government can do, it can afford’. His observations were made at a time when the pound was tied to the dollar, but since Nixon came off the gold standard that tie no longer exists and MMT is simply an observation of money flow post Nixon. Our government is not like a household that depends on an income, our government issues it’s own currency and cannot therefore run out of it’s own currency. That is happening here and now.

The only other policy aspect of MMT is a policy for real full employment, we had genuine full employment as a policy objective before monetarism some along and redefined full employment to mean what ever unemployment we happen to have.
 
I ask, once again, has the MMT "formula" ever been used?

Maybe they have, but can you have a quick shot at answering now?

A few other members have asked the same question. Team MMT's first response was...you're asking the wrong question. They have now moved onto...it's happening right now in the UK because the government issues its own currency, which is clearly specious. The short answer to your question is no.
 
Helicopter money is Milton Friedman’s term to describe how government spending is always and everywhere inflationary.

I don't think that's correct. He was using helicopter money as a way of ridiculing Keynes's ideas about unconventional monetary policy in a liquidity trap (i.e. very low interest rates at the same time as an excess of desired savings).

Although three things are worth noting about Keynes's thoughts on money in the General Theory:

1) He suggests that we use the money to pay people to do work rather than just giving it to them (the money miners thing).

2) He thinks it would be better to use the money to do useful things like build houses and roads as this will grow the economy in the long run.

3) All this is possibly because modern money means the classical quantity theory of money is incorrect (in fact often it's actually harmful).

But the term "helicopter money" stuck because it's a powerful and understandable image so now it has come to be used (colloquially) to refer to that type of unconventional monetary policy, both in the short term (e.g. as an acute response to the 2008 GFC or COVID) or the longer term (e.g. Corbyn's "Peoples QE").

Finally, I should perhaps say that when I say Keynesian I am referring to my lay understanding of traditional Keynesian economics. I do not have any background or much knowledge in New Keynesian or Post-Keynesian academic developments.
 
I don't think that's correct. He was using helicopter money as a way of ridiculing Keynes's ideas about unconventional monetary policy in a liquidity trap (i.e. very low interest rates at the same time as an excess of desired savings).
Not sure what the issue is. Friedman did come up with the helicopter jibe to say that public spending was, in his words, always and everywhere inflationary. Yes he used it against Keynes, but also against FDR and the Deal. What are you saying is incorrect?
Although three things are worth noting about Keynes's thoughts on money in the General Theory:

1) He suggests that we use the money to pay people to do work rather than just giving it to them (the money miners thing).

2) He thinks it would be better to use the money to do useful things like build houses and roads as this will grow the economy in the long run.

3) All this is possibly because modern money means the classical quantity theory of money is incorrect (in fact often it's actually harmful).

Well, we could pick through that, but still not sure how any of that contradicts anything I’ve said. Take a look at 3), yes Keynes contradicts or at least questions Classical quantity Theory of money, so does MMT. Monetarism adopts it.
But the term "helicopter money" stuck because it's a powerful and understandable image so now it has come to be used (colloquially) to refer to that type of unconventional monetary policy, both in the short term (e.g. as an acute response to the 2008 GFC or COVID) or the longer term (e.g. Corbyn's "Peoples QE").

If you mean that helicopter money is a trigger word used against spending in much the same way as “printing money” is used for the same purposes of o Siri g understanding then I agree. But they are just trigger words and do not provide any understanding of how money works. Helicopter money certainly does not describe QE and spending on Covid was just spending on Covid. It was only unusual because of an ideology that doesn’t approve of any public spending.
Finally, I should perhaps say that when I say Keynesian I am referring to my lay understanding of traditional Keynesian economics. I do not have any background or much knowledge in New Keynesian or Post-Keynesian academic developments.
OK, but still not sure if you are working from Monetarist assumptions or Keynesian ones
 
Let's factor in all the gig economy, ZHC stuff though. How is 'employment' defined? Does somebody working 17 hours per week, on a ZHC, count as 'employed'?
It's the same question as asking whether I am "employed". I run my own company, at present I am in a contract, I go to work every day. Earlier this year I was between contracts, I spent a few weeks not going to work. Was I still "employed"? Yes, I was still in charge of my company, even though I wasn't really doing anything, and I, or my company, had no income. Now what about part timers?
The answer to both these questions is that there will always be a certain amount of "churn". It's a coarse measure. A 5 minute Google gives me that there are 917k people on ZHC. Down from 990k in 2021. These numbers are going to get lost in the noise of 1.3M vacancies and 1.25M unemployed. Intuitively if there are 1.3M vacancies and only 1.25M people unemployed to fill them then the ZHC employees are hardly going to be underemployed, assuming of course that the work is in the same location and does not require specialist skills. I know at first hand that our factory here in S Yorkshire is looking for employees between now and Christmas. Full time, various skill levels, mostly unskilled so open to all. Same at the last place, a chicken factory in E Anglia, and the one before, in Wales.
So I'll ask again, if this isn't full employment, then what does full employment look like?
 
July 2022 - 1.25M unemployed. Current job vacancies - 1.3M.
Source here:
https://tradingeconomics.com/united-kingdom/unemployment-rate#:~:text=The unemployment rate in the UK edged down to 3.7,new record of 1.295 million.
So what does full employment look like if not this?
Which is why I put in the word “real”. What you have quoted are our Tory Government statistics on Unemployment that have been manipulated time and time again. This government definition of full employment means people being employed, but having several jobs or being dependant of food banks or being in low paid jobs, or having an insecure job, a job on zero hours contracts.

As you say this is full employment, and seem quite happy with Tory definitions I will leave you to it.
 
Which is why I put in the word “real”. What you have quoted are our Tory Government statistics on Unemployment that have been manipulated time and time again. This government definition of full employment means people being employed, but having several jobs or being dependant of food banks or being in low paid jobs, or having an insecure job, a job on zero hours contracts.
Oh give over. You're picking out exceptions to justify your own views. Come and look at our place. You can walk in here and pick up better than £400 a week for unskilled work between now and Christmas. That's in South Yorks. Now OK, it's not going to make you rich but it's a living. It's hardly Ragger Trousered Philanthropist stuff. Come and have a look in the car park.

I'm not suggesting that there isn't real financial hardship, I know at first hand that there is in cases when people are unable to work, for example for medical or childcare reasons, but the implication that employers routinely exploit their employees with ZHC etc is just wearing too bloody thin.
 
That’s like me saying if the govt can print unlimited currency, why give people £400 towards their energy bill, just give everyone £1M.

I appreciate your point is rhetorical, but it's worth answering properly. Which is to say because the amount of money financing you can do without causing inflation is limited by the shortfall in aggregate demand and ultimately the productive capacity of the economy.

So another way of asking the same question is "How much is the recent increase in energy prices causing a shortfall in aggregate demand which will therefore be recessionary?" (bearing in my mind that much of the price rise is external).

Which takes us back to the original question of the thread regarding the banks interest rate increase which I believe is fundamentally a mistake for which I suggest this article.
 


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