tag:blogger.com,1999:blog-2277215496195926573.post5489216322033390351..comments2024-01-01T07:41:51.347-08:00Comments on RALPHONOMICS: Positive Money should study MMT more before commenting on it.Ralph Musgravehttp://www.blogger.com/profile/09443857766263185665noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2277215496195926573.post-10231633126252970722014-10-27T06:05:19.854-07:002014-10-27T06:05:19.854-07:00I see that the link was scrubbed automatically of ...I see that the link was scrubbed automatically of linking information, making my post hard to find. The link is<br />http://mechanicalmoney.blogspot.com/2014/10/mapping-stimulus-to-gdp.html.<br /><br />A base case for fiat money can be established. The base case is a one time injection that is recovered slowly by taxing each subsequent transaction.A single base injection will generate additional GDP, the actual amount of additional GDP is limited by the tax rate per transaction.<br />Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-75000619741444102142014-10-27T00:04:00.810-07:002014-10-27T00:04:00.810-07:00Whence the assumption in your 2nd para that "...Whence the assumption in your 2nd para that "the injection is recovered"? If stimulus continues to be needed, the injection can be left in place, or even augmented. On the other hand if the private sector has a fit if Alan Greenspan's "irrational exuberance", then "recovery" would clearly be needed.<br /><br />Re your last sentence, yes, the effect on GDP will be related (all else equal) to the size of the injection and the size or speed at which the injection is recovered.Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.comtag:blogger.com,1999:blog-2277215496195926573.post-30935894995179702862014-10-26T07:26:34.786-07:002014-10-26T07:26:34.786-07:00This post comparing MMT and Positive Money reminde...This post comparing MMT and Positive Money reminded me of my post linking GDP, the tax rate and the money supply, Mapping Stimulus to GDP. It seems to me that the mechanics of the formula developed there-in supports the MMT position. I do not know how it would relate to Positive Money theory.<br /><br />To briefly describe the theory, an initial injection of new money can be expected to increase GDP and then the injection is recovered to government by taxation. The ultimate amount of GDP increase can be predicted based on the tax rate. <br />Roger Sparkshttps://www.blogger.com/profile/01734503500078064208noreply@blogger.com