Re: Article in the Chronicle of Higher Education

[Harry Veeder <eo200@xxxxxxxxxxxxxxxxxxx>]

>>Warren Mosler:
>> Why there is a positive desire to save financial
>> assets is certainly an interesting question, and
>> one of many taht follow.  But my above opening
>> statment is true even if that desire is 0 or negative,
>> right?

>pdavidson:
> No.  If there desire is zero then Say's Law follows, the economy is always at
> full employment, and there is no money (as we know it) in the system merely a
> numeraire.
>
> If the  private sector has a negative desire, then unless you assume the
> goverment runs a surplus each period, the system will explode.


The system won't explode. It assumes an over employment equilibrium.

Harry Veeder