Keynesian (or Kaleckian) logic leads post Keynesian economists to presume that a variation of state revenues from taxes and sales of Treasury bonds are the result of a variation in state spending and not the other way around. In the past two decades, the exponents of modern monetary theory (MMT) have been at the forefront in asserting the Keynesian (or Kaleckian) logic of this proposition, filling a theoretical vacuum in post Keynesian thinking. The question is that MMT consolidates the Treasury and Central Bank (CB) so that the latter automatically creates purchasing power in favor of decisions of the former to spend. Critics, however, point out that most institutional arrangements forbid CBs to finance the Treasury directly. After Lavoie (2013) the debate has moved forward and seen some convergence. The present paper critically reviews for unfamiliar readers an otherwise almost esoteric but fundamental discussion.

Cesaratto, S. (2016). The State Spends First: Logic, Facts, Fictions, Open Questions. JOURNAL OF POST KEYNESIAN ECONOMICS, 39(1), 44-71 [10.1080/01603477.2016.1147333].

The State Spends First: Logic, Facts, Fictions, Open Questions

CESARATTO, SERGIO
2016

Abstract

Keynesian (or Kaleckian) logic leads post Keynesian economists to presume that a variation of state revenues from taxes and sales of Treasury bonds are the result of a variation in state spending and not the other way around. In the past two decades, the exponents of modern monetary theory (MMT) have been at the forefront in asserting the Keynesian (or Kaleckian) logic of this proposition, filling a theoretical vacuum in post Keynesian thinking. The question is that MMT consolidates the Treasury and Central Bank (CB) so that the latter automatically creates purchasing power in favor of decisions of the former to spend. Critics, however, point out that most institutional arrangements forbid CBs to finance the Treasury directly. After Lavoie (2013) the debate has moved forward and seen some convergence. The present paper critically reviews for unfamiliar readers an otherwise almost esoteric but fundamental discussion.
Cesaratto, S. (2016). The State Spends First: Logic, Facts, Fictions, Open Questions. JOURNAL OF POST KEYNESIAN ECONOMICS, 39(1), 44-71 [10.1080/01603477.2016.1147333].
File in questo prodotto:
File Dimensione Formato  
JPKE Cesaratto The state spends first.pdf

non disponibili

Descrizione: pdf pubblicazione
Tipologia: PDF editoriale
Licenza: NON PUBBLICO - Accesso privato/ristretto
Dimensione 691.68 kB
Formato Adobe PDF
691.68 kB Adobe PDF   Visualizza/Apri   Richiedi una copia
Cesaratto Journal of Post Keynesian Economics manoscritto finale.pdf

accesso aperto

Tipologia: Post-print
Licenza: Creative commons
Dimensione 1.13 MB
Formato Adobe PDF
1.13 MB Adobe PDF Visualizza/Apri

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11365/1005683