Sunday, 20 May 2018

Neil Wilson , A voice of reason in the MMT pack.Within the notation system you use and the limitation of accounting perhaps. But that is a static notation, not a dynamic one.

Roger January 31, 2016 at 9:41 am # 
JohnG January 31, 2016 at 2:29 am #
Cullen Roche is a disaffected former MMTer.
He appears to hate the idea of full employment.
CUllen ROche responded in the comments to Randall Wrays article.
· 111 weeks ago
Randy,
For not knowing who I am, you sure do seem certain of my political beliefs and monetary understandings. Next time you decide to attack us so personally, you could start by at least getting the name of our approach right (it’s just MR – Monetary Realism). It might bolster your argument.
Phil, I never said that. I said the the “printing press is not more powerful than the private production line”. After all, money has no value if there is no output for it to be used to purchase. I don’t think this is “austrian” or even that controversial….
Bod/Dismayed, I never said govt has no role in the economy. In fact, I’ve been in favor of greater govt regulation, deficits, and I am not even against the JG (despite MMT’s misinterpretations otherwise). You regularly read my work and comment at PC so I know you’re aware of this.
Is this what MMT has resorted to now? Petty blog posts, personal attacks and blatant misrepresentations and personal defamation? I sure hope not. I am sorry I disagree with some of your positions, but calling people “retarded”, “anal” and telling them to “get a life” in your blog post is not helping your cause. Feel free to call me all sorts of names now and misrepresent everything I say….
– See more at: http://www.economonitor.com/lrwray/2013/12/11/mmt-often-imitated-never-duplicated/#sthash.XL70Yhgc.dpuf
  • Roger January 31, 2016 at 12:17 pm # 
    This exchange is key Neilw´s blog is well worth a read ( http://www.3spoken.co.uk/search/label/mct ) I think his point regarding the emergent properties expressed as a vector being more rich in meaning than a backwards looking balance sheet are very acute. Neil w has made some very insightful and intelligent contributions to a lot of discussions on MMT I have found on the Web.
    · 111 weeks ago
    I = I + (S – I)
    is straightforward if you think in computer code.
    It’s X = X + 1
    What they are saying is that you have to offset last year’s excess savings of the private sector with more private investment this year.
    It’s nothing sophisticated and is exactly what Steve Keen has been saying in his dynamic equations for years.
    It’s *not* a mathematical equation. It’s a time progression.
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    11 replies · active 110 weeks ago
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    L. Randall Wray · 111 weeks ago
    Neil: logically impossible. Saving is the accounting record of Investment (plus Def+NX). There’s no excess to be used.It is all “used up”. Saving in the next period will be the accounting record of Investment in the next period (plus Def+NX).
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    NeilW 37p · 111 weeks ago
    “Neil: logically impossible.”
    Within the notation system you use and the limitation of accounting perhaps. But that is a static notation, not a dynamic one.
    X = X + 1 is similarly logically impossible, but I execute it all the time on a computer – because it is actually a statement of the state change from one time instant to the next.
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    PhilippeJames 12p · 111 weeks ago
    Neil,
    not sure what you mean. That’s not what they are saying.
    S = I + (G – T) + (X – M)
    (G – T) + (X – M) = S – I
    so
    S = I + (S – I)
    It’s just a rearrangement of the sectoral balances equation that tells you nothing in particular.
    It’s simply a rhetorical device used to say something like ‘private saving mainly equals private investment plus a little bit extra on top which is the net saving part’. The idea is to try to rhetorically reverse the MMT position, which presents ‘net saving’ as central to private saving.
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    NeilW 37p · 111 weeks ago
    Yes, I know its an attempt to quantify a belief in some sort of different causality using fairly lame and incorrect mathematics.
    However causality always has a time element. For something to be before something else it has to precede it in time.
    It would be so much more understandable if the time elements were made specific. Then perhaps everybody would be able to determine what the underlying beliefs actually are and be able to analyse them.
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    L. Randall Wray · 111 weeks ago
    Neil sorry neither of those explanations work. (Not blaming you, of course). From the 1950s, some mainstream Keynesians tried to make their simple models “dynamic” along these lines. They fail logic and accounting. Don’t forget that identities are identities. Always. Every point in time and over time.
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    NeilW 37p · 111 weeks ago
    The equation is stupid. Let’s get that straight. It’s an attempt to be really clever that falls flat on its face (hence X=X+1 which similar is completely understandable by me but nobody else has a clue what I’m on about. The difference is I will drop that device now because it didn’t work).
    But balance sheet accounting has limitations in that it is a historic snapshot, and is based on policies, and it doesn’t show the causation from one snapshot to the next very easily.
    And it holds all the time because of the logic of double entry that makes sure it does – tortuously sometimes!
    It’s really the delta from one snapshot to the next that is interesting, and then coming up with a way of expressing why that change occurred.
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    L. Randall Wray · 111 weeks ago
    Neil and of course the Keynesians did use proper notation, putting in time subscripts. But then the equations don’t hold. In any event, investment is forward looking, not backward looking to what saving was last year. I expect a couple of years of college economics would help straighten all this out for them.
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    NeilW 37p · 111 weeks ago
    “In any event, investment is forward looking, not backward looking to what saving was last year”
    It it outside the balance sheet within the causality structure. Within the balance sheet what you call investment relates precisely to what you call saving within that balance sheet. And that’s because if you call expenditure on something investment it instantly creates the equal and opposite saving – because that’s what double entry requires.
    The whole problem with the S=I+(S-I) approach is torturing residuals to try and express something that would be better expressed in a different way.
    If you say capitalists are dirty profit hoarders and that’s why things never clear, then there is something to go on. Probably pointing out that the capital debates established that about 40 years ago, and are (I presume) implicit in the MMT analysis.
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    L. Randall Wray · 111 weeks ago
    Neil I pretty much agree but you can get both the flows and stocks in the accounting, as shown in the original Ritter piece (which I am pretty sure is what Wynne originally used to derive his approach). There is an identity for both flows and stocks, obviously. Again, so much time would have been saved if instead of trying to derive the silly and flawed equation, the developer would have taken a couple of economics classes.
    – See more at: http://www.economonitor.com/lrwray/2013/12/11/mmt-often-imitated-never-duplicated/#sthash.XL70Yhgc.dpuf