Eric Tymoigne

Economist @lewisandclark @LevyEcon (Macroeconomics, Money, Finance, Political Economy). (MOSTLY INACTIVE AND RARELY CHECKED, Email for Qs: [email protected])

[Eric Tymoigne @tymoignee]

Thread
The CBO is at it again with its new Primer on the Federal Debt https://t.co/sxCKCDWUWX
Below is a thread but for a fully developed counter argument see this: https://t.co/xnq6op9A2V

[Eric Tymoigne @tymoignee]

@Ivan_Vesely_ The issue is that the proper functioning of T markets is relying further on participants that don’t have a close working relationship with the Fed. Harder for PMs to make market. Fed either will have to intervene more directly or find additional new partners (or rework Basel 3).

[Eric Tymoigne @tymoignee]

The primary dealers system is less and less able to contribute to smooth financing of Treasury. Hedge funds greater involvement and higher leverage (with banks providing financing to them) => more instability + sensitivity of rate to issuance has gone up. Not good signs.

[Eric Tymoigne @tymoignee]

But how are we paying for this? We have no money, bond vigilantes don't want to lend to us, we are bankrupt. At least that what, we were told when we proposed to do medicare for all, student-debt relief, green new deal, etc. It does not apply now? I am confused.

[Eric Tymoigne @tymoignee]

@tblrj Yep

[Eric Tymoigne @tymoignee]

The opposite is true : “Our single currency, the euro, has strengthened the monetary sovereignty of Europe area countries.” Piero Cipollone
https://t.co/FvXn3ydQf4

[Philipp Heimberger @heimbergecon]

We have a new paper on the effects of fiscal consolidation in EU countries. Fiscal consolidations lower real output, raise the unemployment rate, increase income inequality, and reduce inflation. Contractionary effects are stronger during recessions than in non-recession periods.

[Eric Tymoigne @tymoignee]

@wgoggin Right.

[Philipp Heimberger @heimbergecon]

Our research suggests monetary policy is less effective in reducing inflation than conventional wisdom suggests. Needed: realistic expectations about what can be achieved + broader mix of instruments (fiscal, industrial, competition) to ensure price stability at a reasonable cost

[Eric Tymoigne @tymoignee]

@HenricCont @AusMMT Daire’s “Economistes Financiers du XVIIIe siècle.” The reference for Law in the wp.

[Eric Tymoigne @tymoignee]

John Law is the true intellectual founder of bitcoin: “if everyone was forced to take it, it might never return, and so its issuer would never be required to redeem it.”

[Eric Tymoigne @tymoignee]

@HenricCont @AusMMT I know. I read the thing. You’ll find the full letter of Law in the compendium cited in the wp

[Eric Tymoigne @tymoignee]

@HenricCont @AusMMT Just no. Also note that Dutot was a colleague of Law at the bank.

[Eric Tymoigne @tymoignee]

@HenricCont @AusMMT You’ll find it here on page 78 in the section regarding the historical debate about forced (non-reddeemable) vs free (redeemable) currency
https://t.co/lYBd8idzQB

[Eric Tymoigne @tymoignee]

@HenricCont @AusMMT Come on. Do better. If you want the reference just ask.

[Eric Tymoigne @tymoignee]

@HenricCont @AusMMT Darren got it. This was written in 1720 in letters to defend his system.

[Eric Tymoigne @tymoignee]

@Tommy_Hoare I am not familiar enough to give you proper references

[Eric Tymoigne @tymoignee]

@GeorgeSelgin That is the point of Law here. Not being redeemable is ideal. We are stuck with them.

[Eric Tymoigne @tymoignee]

@tonywestonuk So not only is it a huge resource waste, ecological nightmare and a vehicle for frauds, but also the monetary foundations upon which it rests are unsound.

[Eric Tymoigne @tymoignee]

Just a quick reminder. Fair price is zero. This thing is running on self-fulfilling vibes and suspended disbelief.
https://t.co/x36SQwxyGD

[Gambling is Life @GamblingMemez]

What would you do in this situation?

[Eric Tymoigne @tymoignee]

@tonywestonuk The term fair price refer to financial value, think fair price of a security. In some way it reminds me more of what John Law thought was ideal: “if everyone was forced to take it, it might never return, and so its issuer would never be required to redeem it”

[Eric Tymoigne @tymoignee]

@MaxJerneck I’ll give you a “mostly”🙂. The post adds all these other stuff.