Friday, May 23, 2014

Simon Wren-Lewis likes Positive Money?

Simon Wren-Lewis (Oxford economics prof) argues for cooperation between central banks and fiscal authorities, which is very much Positive Money policy. Or to be more accurate, PM argues for fiscal and monetary policy to be merged – joined at the hip.
So Wren-Lewis kind of supports Positive Money policy, though he doesn't actually mention PM. 
It’s certainly illogical to have two separate bodies taking decisions on stimulus: that’s the central bank and second, fiscal authorities. As to exactly who the “fiscal authorities” are, the answer to that is not entirely clear cut and it varies from country to country. The “authority” consists to some extent of politicians, to some extent a country's finance minister, and some countries have the equivalent of the UK’s “Office for Budgetary Responsibility”.

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