Saturday, April 10, 2021

Model Justification for "Trade Between Ontologies Needs Hard Money"


The essay "Hard Money, Soft Money, and Economic Ontologies" described the differences between hard physical money and soft ethereal money in a very general way. It then went on to build on the concept that trade between ontologies depends upon physical money. Here we will use a model to demonstrate why this might be correct and add some reservations related to valuation over time periods.

We will build the model by using what might (at first) be considered a two sector model. To dismiss the model as a simple two sector economic presentation would be to miss the essence of the concepts presented. This model is about two ways of economic thinking driven by two different circumstances positioned in the minds of decision makers in each of two ontologies. We use the word ontology in place of 'sectors' to emphasize that the two groupings have, for good reasons, different time-related concepts of 'money'.

Wednesday, March 31, 2021

Hard Money, Soft Money, and Economic Ontologies

 V. Ramanan gave my thinking quite a boost when he posted his comments on a recent critique of "neochartalism by Costas Lapavitsas and Nicol├ís Aguila at the Developing Economics blog titled Monetary Policy Is Ultimately Based On A Theory Of Money: A Marxist Critique Of MMT." 

Ramanan's contribution to my thinking revolved around the idea that the international acceptance of currencies does not fit into a soft currency framework. This realization fits perfectly with my earlier thinking that society functions systematically with the private economy operating under a hard, Physical Money constraint at the same time that the government sector acts out a soft, Ethereal Money existence. As both Ramanan and C.L. with N.A. point out, international trade also functions systematically under a Physical Money constraint.

It turns out that this realization is an important part of building a better understanding of the effects we might expect as MMT style fiscal policies come to be practiced more vigorously around the world.

Thursday, September 10, 2020

Imagining a MMT style JG World

 This morning, I am imagining a MMT styled world wherein I am trying to decide if I should become a barber (one who cuts hair). I know that the government will give me a guaranteed job doing something; why shouldn't the job be barbering (the job might also doing social work or any other productive effort).