Re: Economic reform policy: Some views and proposals

[Warren Mosler <mosler@xxxxxxxxxxxxxx>]

--- "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> wrote:
>
>
> Warren Mosler wrote:
> > --- "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> wrote:
> >
> >>Paul is absolutely correct.  Further more, the
> >>Mosler/Mitchel/Wray
> >>proposal does not deal with the froeign exchange
> >>problem.
> >
> >
> > ???  There is not foreign exchange 'problem' apart
> > from fixed exchange rate policies, is there?
> >
> > Also, as per your other post, why would anyone
> want to
> > force an exporter to spend his fx earnings???
>
> Warren, we have been through this before. Under
> dollar hegemony,

An observation, but not a law, etc.

fixed
> exchange rates require dollar reserves to hold.

Fixed exchange rates are not actually 'required' by
anything real.

 The
> Mundell-Fleming
> thesis, for which Robert Mundell won the 1999 Nobel
> Prize,
> states that in international finance, a government
> has the choice
> between (1) stable exchange rates, (2) capital
> mobility and (3) policy
> autonomy (full employment/low interest rates,
> counter-cyclical fiscal
> spending, etc). With unregulated global financial
> markets, a government
> can have only two of those three options.

And I would, as before, argue that if you pay
attention to 3), preferably in the context of elr/jg,
(but just about any full employment policy is better
than today's world wide unemployment policy) 1)
matters little to not at all and 2) only matters if it
forces you into a net export posture (another
fundamental all seem to have backwards).

Heck, Henry, no one, including economists, can even
figure out if they want their currency to go up or
down anymore, nor can they sort out real vs financial
capital when they make statements.

Didn't I also read that Mundell stated that with
floating fx interest rates were market determined, as
opposed to govt determined with fixed fx?

Warren
>
> Henry
>
>


=====
Warren Mosler, www.mosler.org
c/o James River Capital Corp
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Primary email contact:  mosler@xxxxxxxxxxxxxx

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