New Addition to Mandatory Readings:
December 1998, loosely structured lecture in Newcastle, Australia.
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Warren, link is broken because the epicoalition site is down.
Iceland Won’t Bring Back Free-Floating Krona
The island is still recovering from its 2008 banking meltdown, which sent the krona down about 80 percent against the euro offshore before the central bank halted the sell-off with capital controls
Was this right action in your opinion Warren?
Do you think that free floating krona would be too volatile?
WARREN MOSLER Reply:September 15th, 2011 at 8:16 am
not what i would do to serve public purpose
nor did they do what i would have done re the ‘crisis’
yes, i’d float the Krona, along with a lot of other things.
With what they are doing, you might call it Crisisland (with a lime in the krona)
great paper warren. as a laymen some of your shortest statements are the most helpful to bring focus to the larger picture (ex. the only reason to trade is to import….or the cost of importing is exporting.)
so i’m trying to get my head around exchange rates from a MMT perspective. You mentioned inflation and currency deprecation are pretty much the same thing. you’ve also mentioned that the value of a currency is determined by the prices paid by the currency issuer. along those lines of thinking how would you perceive exchange rates changes among large currency issuers (USD, Euro, Yen, GBP)? would it be correct to say each currency issuer sets their own currency value and the markets react accordingly to chase profits setting exchange rates in the process? not sure if that makes any sense but it almost seems as if the currency issuers are the prime movers within the economy and currency users react accordingly. as you can tell its a bit foggy so any insight to bring clarity would be helpful.
WARREN MOSLER Reply:May 20th, 2011 at 4:42 pm
yes, you are correct, with neither the currency issuers nor the currency users understanding how it works, and acting accordingly
MamMoTh Reply:May 20th, 2011 at 5:14 pm
A very interesting article indeed. IMO it deserves to be in the top 5 mandatory readings, whilst other links should be better shifted to the proposals section.
I wonder how the Euro fits in the picture. As I understand, in the case of a peg, the exchange rate is exogenous and the interest rate endogenous, whilst in the case of a floating currency it’s the opposite. But in the case of the Euro for EZ countries it seems both rates are (at least partially) endogenous. Is that right?
WARREN MOSLER Reply:May 23rd, 2011 at 10:23 pm
the euro is a floating fx regime
the national govs are like the US states, the ECB like the Fed which sets rates
MamMoTh Reply:May 24th, 2011 at 10:21 am
Well, I know that. But EZ countries still have their own central banks which are responsible for maintaining the interest rate set by the ECB within their domestic banking system right?
WARREN MOSLER Reply:May 24th, 2011 at 9:45 pm
yes, they are agents of the ecb which sets rates, like the ny fed sets rates set by the dc fed
giulio Reply:May 25th, 2011 at 4:39 pm
so in EZ, what’s the role of bond issues? in EZ isn’t a monetary operation, is also a fiscal operation, right?
BSE = Breast Self Exam
BSE = Bovine Spongiform Encephalopathy
roger erickson Reply:October 6th, 2010 at 12:34 pm
put the 3 together and you have Congress! amazing!
Bovine Spongiform Employment
linguistics is truly awe inspiring; this could spawn an entirely new cult, maybe even a political party
beowulf Reply:May 24th, 2011 at 12:41 pm
“linguistics is truly awe inspiring; this could spawn an entirely new cult, maybe even a political party”
Watch out for that Noam Chomsky. :o)
To those reading this post:
BSE stands for Buffer Stock Employment which is currently referred to as the Job Guarantee.
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Warren B. Mosler