PDCA日記 / PDCA Diary

継続は創造だ! / Continuity is Creation!

PDCA日記 / Diary Vol. 28「信用乗数は存在しない?」/ "Credit multiplier does not exist?"

English follows Japanese.


PDCA日記 Vol. 28「信用乗数は存在しない?」】




既に予備選挙に立候補することを表明する人が出始めていますが、今アメリカで話題になっている経済政策として、「現代貨幣理論(Modern Monetary Theory:MMT)」があります。





























P.S. 経済学を勉強したことがある方であればお分かりだと思いますが、時々「あれ?」と感じる不思議な理論が出てきます。








まあ、世の中「本当かな?」と感じることが多いので、経済学のように「あれ?」と感じることが多い社会科学の分野があってもよいのかもしれませんね :-)。


< Mr. PDCAのボンジュール英語「乗数」 = 「multiplier」>









【"PDCA (plan-do-check-action) Diary Vol. 28 "Credit multiplier does not exist?"】


In 2017, Trump administration has started and the next US presidential election will be held next year in 2020 (As the proverb mentions, "Time flies" :-).


There are several candidates who have already announced that they will run for primary election, and new economic policy "MMT (Modern Monetary Theory)" has been discussed in the United States.


In short, MMT is a theory that "If a zero interest rate goes on, no matter how much fiscal deficits exist, there would be no problem."


As a story similar to MMT, there is the "New Economy Theory" which was explained by economists when I worked in New York in the early 2000s.


The New Economy Theory states that 'Inventory adjustments will be implemented efficiently and the economic cycle disappears thanks to the development of IT'.


However, due to the collapse of the IT bubble and the occurrence of the financial crisis in 2008, it was confirmed that the New Economy Theory was not correct.


Currently, the real interest rate (the nominal interest rate - the inflation rate) in the United States is zero.


From the viewpoint of economics, the problem of fiscal deficit will not occur by continuing economic growth as long as the zero interest rate continues.


However, MMT does not explain countermeasures for future rise of interest rates.


The material to be introduced today "Modern Money Theory" has a catchphrase that “The first book systematically explains MMT” and contains a lot of illustrations.


As this book emphasizes that “prior knowledge on economics, interest rates, prices, etc. is not necessary”, it is quite easy to read even if you are not interested in finance.


What I found interesting in the MMT theory is that it reiterates “credit multiplier does not exist”.


I think that you can check the details of credit multiplier in the internet, but in simple terms, if you deposit money in the bank, the bank will provide funds to individuals and companies who would like to lend money, and then funds beyond the deposit will go to the market.


Economics still affirms this credit multiplier and often this theory appears in textbooks.


However, research has confirmed that there is no credit multiplier, and the mainstream economists in the US started to discuss what MMT advocates.


There is US presidential election next year, and we need to keep our eyes on how MMT will be discussed among candidates :-).


Let's function PDCA today!

Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems

Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems