On Wed, Oct 1, 2025 at 4:43 PM ivan invernizzi wrote:
Hi Warren,
You first mentioned this to me in 2015, while we were driving on the highway between Milan and Bergamo, somewhere between Trezzo sull’Adda and Dalmine, just before reaching the motorway service area with the bridge-like restaurant.
You used a comparison with physics, noting that in physics you can’t really “pull” anything—there is no such thing as a “negative” force. You explained it by saying something like: “Pulling is just pushing—the application point is always behind .”
You then extended the analogy to money, saying that with money is the exact opposite can only “pull”; there is no such thing as “pushing money” (I believe you were referring to the idea of “pump-push spending”).
You went on to explain that in the monetary system everything is pulled by taxes: money enters the economy through public spending and is then pulled through the system by taxation (like a vacuum), until it is ultimately eliminated from the system. You emphasized that not all units of currency pass through the same number of transactions before disappearing due to taxation. Some exit the system after just one step, while others follow long and complex paths throughout the economy.
I later developed this idea —calling it the “currency filter” by combining your insight with the observation that access to currency is not equal: not everyone has direct access to it from the primary supplier, so many are forced to obtain it indirectly from others closer to the primary source. I discussed this in my article on exchange rates and in my dissertation, both of which you reviewed.You find the links below:
By the way I’m pretty sure I have the recording of your explanation: 10 year have passed but it seems to me it was yesterday.
Ciao! :)
https://mmt-france.org/2021/06/20/mmt-theory-of-exchange-rate/