Thursday, July 26, 2012

Miscellaneous Links

Some recent links of interest:
(1) Steve Keen, “The Euro as the SDR of Europe?,”, July 26th, 2012.
A nice analysis form Steve Keen on why the Eurozone is such a disaster. Keen makes the point the point that economists “as widely apart ideologically as Wynne Godley and Milton Friedman observed long before the Euro began that it would fail (a) because it imagined that a market economy would reach a harmonious equilibrium on its own without government intervention—which Godley correctly characterized as a deluded neoclassical fantasy; and (b) because it pushed together widely disparate nations which Friedman noted were utterly unsuited to a currency union.

(2) Thomas Palley, “More on the Spurious Victory Claims of MMT,”, July 25th, 2012.
Thomas Palley criticises MMT with reference to the Eurozone crisis (and is also reprinted over at the Naked Keynesianism blog). Palley charges that “MMT lacks a convincing theory of interest rates, over-simplifies the economy by assuming an L-shaped supply schedule that ignores the effects of sectoral bottlenecks and imbalances, lacks an adequate theory of inflation, and ignores expectations and exchange rates,” which seems a bit unfair to me, given that MMT take ups previous Post Keynesian theories of both interest rates and inflation. L. Randall Wray now has a good response to Palley here.

(3) Paul Davidson, “Is Economics a Science? Should Economics Be Rigorous?,” Real World Economic Review 59.
An article from Paul Davidson on the nature of economics and methodology.

(4) Ann Pettifor Interview on the Eurozone Crisis and Integration


  1. Randy has responded to Palley on Economonitor.

    "Yet Tom’s argument is that MMT has always been flawed. First, it supports full employment. More specifically through the Job Guarantee. He has always opposed that. You see, he worries that if we give jobs to the poor, they’d buy food and that would drive up food prices for the already employed. My view is that is wrong on so many levels, especially for anyone who claims to be progressive."

    1. I have added that link by Wray above.

      Thanks for that.