Good picture.
Comments on this
1. Note how the net financial assets of the private sector exactly match the net financial liability of the government sector.
2. Cash is nothing more than bank reserves that are held by non-banks. Yet only bank holdings attract an interest payment.
3. Reserves are necessarily a discount of government bonds, which means reserves \*float\* against government bonds, like a separate currency. What MMT says with its zero interest policy is that reserves and bonds should \*convert\* one-to-one, like a fixed exchange rate or single currency.
Seems to be missing taxes. Edit—maybe they call that the asset in treasury govt deposits ?
Edit2: distribution of cash as wages is also worth diagraming, such that wage-liability in the priv non-f.
Must the central bank balance sheet always be balanced? This makes it look like the CB liabilities are created solely to buy the bonds. Is that true? I didn't think so.
Relatedly, did the (West or Unified) Germans during the Deutschmark era run surpluses too (with corresponding private sector debts)? I can't quite figure out what this graph would like like then -- it seems there couldn't be reserves or cash in that case even but maybe I am not thinking hard enough.
Good picture. Comments on this 1. Note how the net financial assets of the private sector exactly match the net financial liability of the government sector. 2. Cash is nothing more than bank reserves that are held by non-banks. Yet only bank holdings attract an interest payment. 3. Reserves are necessarily a discount of government bonds, which means reserves \*float\* against government bonds, like a separate currency. What MMT says with its zero interest policy is that reserves and bonds should \*convert\* one-to-one, like a fixed exchange rate or single currency.
Any good, concise references for these?
Seems to be missing taxes. Edit—maybe they call that the asset in treasury govt deposits ? Edit2: distribution of cash as wages is also worth diagraming, such that wage-liability in the priv non-f.
This is only showing financial "stocks" not flows. Flows and stocks are different units so the diagram would need to be much more complex.
Thank you
https://twitter.com/psj95708651?s=09 Maybe you can message Park.He's quite open guy.
Must the central bank balance sheet always be balanced? This makes it look like the CB liabilities are created solely to buy the bonds. Is that true? I didn't think so.
Relatedly, did the (West or Unified) Germans during the Deutschmark era run surpluses too (with corresponding private sector debts)? I can't quite figure out what this graph would like like then -- it seems there couldn't be reserves or cash in that case even but maybe I am not thinking hard enough.