tag:blogger.com,1999:blog-6245381193993153721.post3750361239937961904..comments2024-03-28T17:08:15.784-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: Endogenous Money under the Gold StandardLord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-6245381193993153721.post-37059009575799959162013-05-29T22:41:38.177-07:002013-05-29T22:41:38.177-07:00I've had the impression that under a gold stan...I've had the impression that under a gold standard, endogenous money is what sows the seeds of the GS' destruction. It sets up the condition of overindebtedness that prompts the monetary authority to ditch the GS, much like it prompts it to ramp up the scale of QE etc under a non GS system.RDMKRhttps://www.blogger.com/profile/00547758189555842953noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-85375019902208026892013-05-19T16:18:53.570-07:002013-05-19T16:18:53.570-07:00Isn't a fixed currency effectively a foreign c...Isn't a fixed currency effectively a foreign currency and therefore really exogenous in nature? I'm confused as to how the concept of endogenous money could be applied to such a regime.Anonymoushttps://www.blogger.com/profile/11018306000410021518noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-67476479004813299442013-05-19T12:37:10.155-07:002013-05-19T12:37:10.155-07:00Charles Goodhart is very good on this in his book ...Charles Goodhart is very good on this in his book The Business of Banking. He argues the price-specie flow mechanism doesn't work, changes in money income and credit are closely correlated and that the demand for credit is accomodated (ie income rises/falls lead credit rises/falls). Nathan Tankushttps://www.blogger.com/profile/16298104991209885385noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-42815841853346197992013-05-19T12:08:40.209-07:002013-05-19T12:08:40.209-07:00Of course, business cycles are induced by both end...Of course, business cycles are induced by both endogenous and exogenous forces. Amongst the arguably endogenous forces is the volatility of expectations and the instability of the propensity to invest.<br /><br />That is, no amount of endogenous money or elastic money supply will induce investment in situations of shocked expectations, as we see today in the failure of QE1, QE2, and QE3.<br />Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-59544138411423391402013-05-19T11:23:12.687-07:002013-05-19T11:23:12.687-07:00“did the endogenous broad monetary systems meet th...“did the endogenous broad monetary systems meet the demand for credit?”. No doubt the latter “systems” did meet demand for credit in the sense that any bank would have created credit for anyone approaching a bank with a viable lending proposition. But the problem is that where gold / monetary base flows out of a country, that depresses economic activity, so the “viable lending propositions” tend to dry up.<br /><br />I.e. the simple existence of an endo money system won’t enable an economy to escape a recession. In a sense, that’s the endo money system failing to meet the demand for credit, but I think the latter phrase is a poor description of the problem.<br />Ralph Musgravehttps://www.blogger.com/profile/09443857766263185665noreply@blogger.com