The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
There is precisely one way to inject high-powered money into the economy: Sovereign deficits. So on average over the long run, the sovereign should run deficits.
The fact that you should sometimes run surpluses during the boom part of the business cycle does not change the fact that the sovereign has to be in the red on a cycle-averaged basis, any more than a cold summer disproves global warming.
If you're talking short-run, then attempting to run surpluses is counterindicated at the moment. If you're talking long-run, then surpluses are wrong-headed, full stop.
Austerity can only be implemented in the shadow of a concentration camp.
What is high-powered money supposed to be?
High-powered money is created ex nihilo when the sovereign spends, and destroyed when the sovereign taxes.
Various sorts of low-powered money is created by various sorts of private lending.
(also base money, money base, high-powered money, reserve money, or, in the UK, narrow money) is a term relating to (but not being equivalent to) the money supply (or money stock), the amount of money in the economy. The monetary base is highly liquid money that consists of coins, paper money (both as bank vault cash and as currency circulating in the public), and commercial banks' reserves with the central bank.
by Frank Schnittger - Jul 21 88 comments
by afew - Jul 21 15 comments
by Migeru - Jul 24
by gmoke - Jul 21 4 comments
by Migeru - Jul 24 54 comments
by Frank Schnittger - Jul 16 61 comments
by Oui - Jul 19 4 comments
by Oui - Jul 23 5 comments
by Migeru - Jul 24
by Migeru - Jul 2454 comments
by Oui - Jul 235 comments
by Frank Schnittger - Jul 2188 comments
by gmoke - Jul 214 comments
by afew - Jul 2115 comments
by Oui - Jul 194 comments
by Frank Schnittger - Jul 1661 comments
by Oui - Jul 623 comments
by Oui - Jul 41 comment
by afew - Jul 248 comments
by gmoke - Jul 15 comments
by Oui - Jul 17 comments
by Frank Schnittger - Jun 3055 comments
by gmoke - Jun 2813 comments
by Oui - Jun 251 comment
by ceebs - Jun 244 comments
by Oui - Jun 241 comment
by DoDo - Jun 236 comments
by DoDo - Jun 1229 comments