Mike Segar/Reuters (original image modified)

I guess something that needs to be stressed here is that The Deficit Myth isn’t meant to be “the” book on MMT that explains all aspects of economics. MMT as a body of work is a vast literature for which Kelton…


One of the most important lessons from Econ 101: Nominal figures tell us nothing.

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In 1956, Richard Lipsey and Kelvin Lancaster, developed the Theory of Second Best for the Walrasian model. They demonstrated in their paper that when one optimality condition cannot be satisfied, manipulating other variables away from optimum can create a second best outcome in an economic model. In other words, if one market distortion cannot be removed, then a second best equilibrium can be achieved by imposing a second…


Vox Media has an interesting YouTube video floating around on Facebook about pennies (see below). If you haven’t seen it, you have probably heard a take on the theme: pennies are useless and cost the government more money to make them than they are worth ($0.0107 per penny). While this is true, one might be misled into believing that the government is somehow losing millions of dollars from the manufacturing of the currency, but it’s not when you factor in the rest of coins and bills the U.S. produces into the equation.

In monetary economics, there is a concept…



Since the candidacy of Bernie Sanders for U.S. president in 2016, socialism has been garnering more interest, particularly among young people. A Harvard University survey in 2016 found that 51 percent of young people, between 18 and 29, did not support capitalism, and 31 percent support socialism. The survey clearly indicates young people favor an alternative, but the gap in support for socialism suggests an ambivalence toward what that alternative should be. I would also suspect that of the 31 percent that do support socialism, many do not have a clear idea of what it would look like — in…


​There were many underlying factors which contributed to both the financial crisis and the Great Recession. The trigger of crisis and recession begins with the burst of the housing bubble in mid-2007. As subprime mortgage default rates began to accelerate, overly leveraged financial institutions holding risky products such as mortgage backed securities (MBSs) and collateralized debt obligations (CDOs) triggered a crisis of asset devaluation. Financial institutions holding both MBSs and CDOs and financial derivative products such as default swaps took a double hit inducing a liquidity crisis and immediate default risk.

According to economist James R. Crotty, retired professor at…




AARON MEDLIN

Doctoral student of Economics at the University of Massachusetts Amherst. Commentary, research and more at aaronmedlin.weebly.com

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