Neoclassical Economics and Domain Assumptions

How the learned practice sophistry

by Joe Blackwell

A recent paper authored by two mainstream neoclassical economists [1], Salomon Faure and Hans Gersbach, has caused quite a stir amongst prominent heterodox economists such as Steve Keen and Richard Murphy. The paper seeks to compare and contrast two opposing models of commercial bank lending behaviour (endogenous money model and loanable funds model). Continue reading “Neoclassical Economics and Domain Assumptions”

How to Leave the Euro

A more or less Practical Guide

by Serban V.C. Enache

1) The Government spends and taxes in its own free floating fiat currency. It no longer accepts euros (or any other currency) in payment of Government (central and local) fines, fees, taxes, imposts etc.

2) The Government sector (aka the Treasury and the Central Bank) establishes a desired conversion rate between the new currency and the euro. For example, the Central Bank offers to sell 1 unit of new currency for 1 euro at a slight premium, say 0.5 or 1 percent.

3) No compulsory conversion of euro contracts into new currency contracts. It is enough to establish a level of demand for the new currency (giving it extrinsic value) through sound tax policy and adjust supply of said currency to the desired price. Continue reading “How to Leave the Euro”

Cuba: Sectoral Balances, Unemployment Rate

by Serban V.C. Enache

Between 2008 and 2015, the Cuban Government ran fiscal deficits. In 2018, the Foreign sector ran a financial surplus against Cuba of almost 4% of the country’s GDP; in 2009 and 2012 the surplus was near zero, and in 2013 it reached a surplus of 1.4 of GDP. Continue reading “Cuba: Sectoral Balances, Unemployment Rate”

The Sovereign Nation State

Political vs Cosmopolitical Economy

by Serban V.C. Enache

 

The Globalist View on Statehood

Globalist premise. Most products have developed a complex geography – with parts made in different countries and then assembled somewhere else (goods of trans-national origin). Markets when left alone will allocate resources optimally, thus leading to efficiency and low prices. This, of course, requires the free movement of capital, commodities, and labor. All barriers – like capital controls, trade unions, welfare programs, minimum wage laws, nationalized services etc – will distort prices and lead to malinvestment (waste). Continue reading “The Sovereign Nation State”

Peru, Sectoral Balances and Capacity Utilization

by Serban V.C. Enache

Between 2008 and 2017, the Government of Peru ran fiscal surpluses in the years 2008, 2011, 2012, and 2013 – thus helping to erode domestic private sector equity. In contrast Continue reading “Peru, Sectoral Balances and Capacity Utilization”