Modern Money Theory: Week 3

James E Keenan

Henry George School of Social Science
November 23 2020

Table of Contents

1. Introduction
2. Update on Google Groups

3. Review of Previous Session
4. Venturing into Macroeconomics
5. Sector Balances in Three-Sector Model
6. Sector Balances in U.S. Economy
7. [B[Pause for Questions]B]

8. Macroeconomic Theory
9. National Income Accounting
10. The Great Depression and Keynes
11. Renaming Aggregate Spending
12. Disaggregating Aggregate Spending
13. The GDP Identity
14. [B[Pause for Questions]B]

15. Keynesian Theory of Effective Demand
16. Consumption Spending
17. Consumption Spending Relatively Stable
18. Government Spending Relatively Stable
19. Net Exports
20. Components of GDP: Stable or Unstable?
21. Investment Spending Is Most Variable Part of GDP
22. Employment Varies with GDP
23. The Cycle of Capitalist Production
24. Another Story: Automobile Production
25. What Does GM Say?
26. But Will GM Make Money?
27. Let's Generalize This
28. Keynes' Concept of "Effective Demand"
29. Importance of Expectations
30. [B[Pause for Questions]B]

31. Money and Banking
32. How is Banking Different from Loan Sharking?
33. Banks Don't Have to Amass Funds before Lending
34. Banking: Q and A
35. Endogenous Money
36. Do Banks Lend from Reserves?
37. But Do Banks Lend from Reserves?
38. [B[Pause for Questions]B]

39. Central Banking
40. Institutional Grounding
41. Public-Private Franchise Relationship
42. Job #1: Make Payments System Work
43. Before the Federal Reserve System
44. Job #2: Monetary Policy
45. Is the Central Bank "Independent" of the Government
46. [B[Pause for Questions]B]

47. Taxation
48. Richard Murphy
49. TaxResearch.org.uk
50. The Joy of Tax
51. Richard Murphy on Tax
52. It's Not "the Taxpayers' Money"!
53. Functions of Taxation
54. Create Demand for Currency
55. Organize the Economy
56. Redistribution of Both Income and Wealth
57. Counteract Externalities
58. Encourage Representative Government
59. [B[Pause for Questions]B]

60. National Debt
61. Mantra Applied to Government Sector
62. Once Again ... Monetary Sovereignty
63. Non-Interest-Bearing Government-Issued Liabilities
64. Interest-Bearing Government-Issued Liabilities
65. Monetary Policy
66. Is Federal Borrowing Necessary?
67. Should We "Pay Back" the National Debt?
68. "Paying Back" National Debt Misguided
69. [B[Pause for Questions]B]

70. Bonus Slides

71. Disaggregating Aggregate Income
72. Sector Balances Equation (Redux)
73. Sector Balances Disaggregated

74. Effective Demand and Sectoral Balances
75. What Happens When Businesses Cut Back on Investment Spending?
76. What Can We Do In Response to Fall in Investment Spending?
77. In the Real World, What Happens?