tag:blogger.com,1999:blog-2277215496195926573.post3924491921735831227..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: I prefer Kotlikoff’s full reserve system to Positive Money’s.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2277215496195926573.post-68071979783838798782014-07-23T20:47:14.172-07:002014-07-23T20:47:14.172-07:00It’s important to be accurate about what is meant ...It’s important to be accurate about what is meant by phrases like “PM's proposal would greatly extend the powers of the BoE” . . . . into fiscal territory. PM’s policy in no way intrudes in strictly political decisions like what proportion of GDP should be allocated to public spending or how that should be split between education, health, etc. What it does do is lump monetary and fiscal stimulus together, and the “committee” decides on the total amount of stimulus. That strikes me as entirely logical. I.e. the existing arrangement under which two entirely separate bodies (central bank and politicians) each influence stimulus in their own ways (monetary and fiscal policy) is a bit like having a car with two steering wheels each controlled by different people.<br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-30173355505020460442014-07-23T15:39:01.330-07:002014-07-23T15:39:01.330-07:00Yes, committees are needed. Also democratic accoun...Yes, committees are needed. Also democratic accountability.<br /><br />PM's proposal would greatly extend the powers of the BoE.<br />The existing BoE MPC merely sets interest rates. It does not determine fiscal policy which is far more important. <br /><br /> There may well be a case for changes to institutions and the constitution. But the case for full reserve banking does not depend on any such changes. <br /><br />KongKinghttps://www.blogger.com/profile/10992633301481631373noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-928648317009078312014-07-23T06:10:50.470-07:002014-07-23T06:10:50.470-07:00Strikes me that whatever system we have (fractiona...Strikes me that whatever system we have (fractional reserve, full reserve Mk1, Mk2, etc), we’ll always need some sort of committee determining stimulus. E.g. under the EXISTING system we have the Bank of England Monetary Policy Committee.<br /><br />I.e. the question as to exactly what sort of committee we have and what it does is actually a separate question from whether we have full or fractional reserve.<br /><br />But as it happens, I support the PM “create base money and spend it” model (regardless of whether we have full or fractional reserve). MMTers seem to support that model as well, though they’re never very explicit about it.<br /><br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-51273008242178172552014-07-23T01:36:40.756-07:002014-07-23T01:36:40.756-07:00"Kotlikoff’s system is simpler than PM’s and ..."Kotlikoff’s system is simpler than PM’s and better". <br />Yes indeed. <br /><br />Also important is that Kotlikoff’s system does not require PM's proposed committee of economic "experts" at the Central Bank.<br />Banking reforms do not require any controversial changes to current arrangements for determining fiscal policy.KongKinghttps://www.blogger.com/profile/10992633301481631373noreply@blogger.com