In this final video in a mini-series on how money has got its value in the fifty years since the final link between money and gold was broken I look at the issue that is always raised whenever it is pointed out that a government is free to create any amount of money it wishes, which is inflation.
Much of the video explains why hyperinflation of the sort seen in Weimar Germany, Zimbabwe and Venezuela happens, and why it is incredibly rare.
Then I explain how a government has to manage inflation, not on the basis of balancing its books, but on the basis of balancing its economy around the economic plans it has for it, and why this is possible.
There is nothing to fear about government-created money. It does, in fact, liberate us to deliver the economy we need. We just need to understand how. This video seeks to demystify that process.
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Excellent video on a Thursday morning. Should be required viewing for every economics, social and political studies student and every aspiring politician. We live in a critical time facing combined ecological, economic, social and political melt downs. To prevent mass global poverty, resource depletion, irreversible global warming and major social unrest we must get to grips with alternative thinking that you advocate. Last decade, this decade and the next one.
Excellent conclusion to an excellent mini-series. A fitting commemoration of the 50th anniversary of the demise of the gold standard.
As Brexit-induced supply chain disruption intensifies, I wonder if we will see a minor version of type 2 (Zimbabwe style) inflation in the UK?
No….the disruption is minor in comparison
I feel you could have made it clearer that since we are nowhere near full employment in the UK today, the need to constrain the private sector via tax in the short term does not exist yet.
Otherwise excellent!
Accepted
Thank you, Thank you, & Thank you.
And it is spot on from what I’ve been able to grasp through coming here.
No one can call you inconsistent. Well, they can but we know about them already don’t we?
🙂
We used to hear only a few years that we had only 4% unemployment and that as many people were between jobs, we more or less had full employment. Others claimed that if someone was employed for a few hours a week, they were employed and the figures were being manipulated. In the sixties most people worked a full week and part time work was around half a week.
Have we changed the method if measuring employment to disguise the number of people who would work if they could but are not being counted?
We also hear that in southern Europe as many as 25 %, of young people are unemployed. Usually this is presented as evidence of the EU not being as competitive as the UK in providing jobs. I wonder if this figure is achieved by calling students and possibly women at home with families, ‘unemployed’. It may also be a number are self employed on a very insecure basis in the UK and don’t reach the unemployed statistics.
It would seem that establishing what is full employment, is not straightforward.
Danny Blanchflower is the guru on this
I may ask him to do a blog….
A blog on employment statistics and measurement over the years would be very helpful as furlough comes to an end and the workforce continues to adapt to the coronavirus world. All very well telling us that lots of people have jobs and that lots of jobs have been created, but if doing those jobs doesn’t enable people to cover their costs of living on an ongoing basis, then they’re not much good, are they? However we live in a world where people vote in droves for politicians like Raab and Patel who publicly claim that British workers are the most idle in the world.
Thanks Richard
I am a little confused about constraining the private sector
Does an advanced economy not require a large trading sector ?
I’m trying to join the dots in my understanding re. MMT thinking & traditional economic thinking about what actually drives our modern economy
eg do we need more widget maker workers than nurses ?
does it really matter what job a person does as long as it creates value to the country.s economy ?
It does not matter
What matters is that the value created is recognised