Re: Mosler: seminar

[Warren Mosler <mosler@xxxxxxxx>]

William B. Ryan wrote:

> 1.  Regarding Mosler's seminar introduction:
>
> http://csf.colorado.edu/mail/pkt/may98/0357.html
>
> Reference was made to a "Professor Mathew Forstater."
>
> Who is Professor Forstater?

Professor of Economics, currently at the Levy Institute.He can be reached at
forstate@xxxxxxxx

>
>
> 2.  Mosler's usage of the terms "horizontal," "vertical," "endogenous"
> and "exogenous" do not appear to conform to conventional Post Keynesian
> usage.
>
> 3.  Mosler's thesis is that money, in every form and from whatever
> source, derives its value from the imperative to pay taxes in government
> issued "currency."

You are reading too much into the paper.  This draft states that it is
providinga framework for analyzing tax driven currencies.  Not 'money' in
general, whatever that is!


>
>
> It is not as simple as that.
>
> Conceptual analysis of the money supply is difficult, because it is a
> complex composite of several components arising from several
> sources--exogenous and endogenous to the economy of market transactions.
>
> There is 1) Fiat money issued by the sovereign authority of government,
> which is spent into circulation,

Vertical activity in the model.

> 2) Bank credit, which derives from the
> private contract between banker and entrepreneur, that is loaned into
> circulation,

Horizontal activity in the model.

> and 3) The revolving fund of finance,

Also Horizontal activity in the model.

> which derives in the
> first instance from the concatenation of fiat money and bank credit.
>
> Neither government's spending of fiat money or the lending of bank
> credit is supply constrained;

As per the model.

> it therefore tends to drive the interest
> rate curve toward the "horizontal."
>
> But the revolving fund of finance is ~instantaneously~ measurable, as if
> it were a commodity; it is supply constrained. Therefore, the demand for
> loans from the fund tends to drive the interest rate curve toward the
> "vertical."

I'll stick with Moore's analysis (H and V, 1988).

Warren Mosler

>
>
> See:  http://csf.colorado.edu/mail/pkt/may98/0001.html
>
> Bill Ryan
>
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