Wednesday, March 28, 2012

Garth Brazelton — Global Currency Reserve


I don't understand how some liberal (read: New Keynesian) economists like Stiglitz want to, essentially, create the same conditions that Greece now faces - only on a global scale.
Read it at Reviving Economics
Global Currency Reserve
by Garth Brazelton

Mentions Warren Mosler at the end: "And I happen to think Warren Mosler's idea from a year ago of essentially (and somewhat sneakily) creating a new Greek currency (but not quite) by turning Greek bonds into a form of money (means of payments for public debt - pay your taxes with a bond!) was pure genius."

See also the Wikipedia article on the Bancor global currency proposed by Keynes for some history on the concept.

1 comment:

Dan Kervick said...

If we ever create a global democratic government with a central global treasury exercising global fiscal authority on behalf of the world's people, as expressed through the global legislative branch, then I would be willing to accept a global currency. But not until then.

That's the lesson of Greece: monetary authority that is not yoked to fiscal authority can't deliver countercyclical aggregate demand support for its people and becomes an instrument of elite tyranny. The power of the printing press has to be tied to the power of the purse.