I have put 23
papers/notes on this web site. They are mostly in Portable
Format (pdf). I give the Titles,
links to the files, and (sometimes) abstracts of the
you will observe, there is some overlap between a couple of
have me as sole author, except one.
put an "economics
file) here. It contains five powerpoint presentations
given in september 2013 at FLACSO
in Quito, Ecuador - all about stock-flow economics in
The five ppt presentations regularly point to pages -
large numbers in red - in a 102 pages article collection,
which is also
in the zip file. Many of the articles below are in this
A program proposal for creating a complementary currency in Greece
with co-author Robert W. Parenteau
(page 2 in the Real-World Economics Review, issue 71, 28 May 2015)
ABSTRACT: This paper describes the concept of a national “complementary” or “parallel” currency, and the advantages of implementing it in the form of purely electronic money – no bills and coins. It suggests a fairly detailed program for how a parallel or complementary currency to the euro could be introduced in a crisis-hit eurozone country, focusing on Greece. Finally, some questions and counterarguments are addressed.
The Central Bank with an expanded role in a purely electronic monetary system
(page 66 in the Real-World Economics Review, issue 68, 21 august 2014)
ABSTRACT: Physical currency (bills and coins) is being
out as an important means of exchange both in developed and
countries. Transactions are increasingly done by debit card,
and mobile phone. This technologically driven process opens up
very useful possibilities, among these new and -- for society --
beneficial roles for the Central Bank. The paper assumes a
where the country in question issues its own currency, and all
"electronic" -- no bills and coins. This gives an extra impetus
sovereign money solution; all deposits are at the Central Bank.
The paper also argues that in such a system -- where banks are not allowed to create "credit money" when issuing loans (in this resembling the "100% reserve" solution supported by many reformers) -- the economy need not, in spite of this, be "starved" of credit for investment -- a warning that is not only sounded by the defenders of today's financial system, but also by many of its critics. This goal might be achieved by the unconventional trick of letting commercial banks create the needed sovereign money at the Central Bank for their lending.
A third point of the paper is to argue that simplification of the financial system should be a goal in itself.
A simple proposal to kill high frequency trading in the stock market
This is a short note (also here, in the Real World Economics blog) that suggests how one could get rid of the current parasitical and absurd automated microsecond-scale trading activity. It can also be applied to reduce "day trading".
Physical and social systems may be modeled with the same sort of tools!
This is a short note challenging heterodox economists that are "math-averse", more generally arguing for systems theory applied to human groupings.
are able to create additional credit money (bank-m-creation.pdf)
This note tries to explain, in a simple manner via an imagined example, how a bank is able to create extra "credit money" when lending. A less intuitive and more comprehensive treatment is in this paper below.
No, there need not be lack of
"100 % money" (credit-100pc.pdf)
(This is a brief note.)
Control with Electronic Money and Modern Monetary Theory
advantages and two possibilities with a parallel electronic
(This is a one-page note summing up and extending the main points in the first paper below)
for the The German
Association for Small and Medium-sized Businesses.)
A recipe for a country to gradually and possibly exit from the eurozone through a parallel emergency currency realised via the mobile phone network (paper-wolfson.pdf)
Capitalists can enjoy a
flow in an economy with no injection of fresh money (profit-poss2.pdf)
(This is a brief provocative note.)
ABSTRACT: There is
large and elaborate literature in economics about the
capitalists in the aggregate enjoying a stable profit. Many
have been put forward for this to be feasible, for instance that
("fresh") money must be persistently added to the system,
the form of bank credit. This brief note argues that this is not
necessary, and that this is very simple to conclude by using a
continuous time linear model of a closed economic circuit. The
also explains Marx' m-c-m' puzzle. Furthermore it argues that a
constant -- not falling -- profit rate is feasible, and that
profit rate is independent of capitalists' share of output.
The fundamental mechanism behind the global financial crisis (sysdyn-debtcrisis.pdf)This is a lecture note (October 2011) for my students in system dynamics. It is very simple, but because of that I believe it makes the crucial point clear.
Greeks did this?
- A high-tech parallel monetary system for the underdogs (greece-etc-2.pdf)
and in the proceedings of the 9th Society of Heterodox
Conference, December 6 and 7 2010, UNSW, Sydney. The paper was revised in October
2011. The first, and shorter,
June 25 - 27, 2010. The
version is here, in the Real-World
Review, issue 59, 12 march 2012.
ABSTRACT: One prominent characteristic of the
decades-long run-up to today's global financial crisis is the
increasing relative size of debt and the financial sector in
economies. A mechanism explaining this, related to financial
accumulation through non-financial capitalists' lending, is
The exercise also leads to the conclusion that in the
financial accumulation by capitalists through the alternative
real-economic investment, is not feasible.
(This is a working paper).
Fundamental financial accumulation dynamics (accum-08.pdf)
ABSTRACT: Any economic system with interest on
money lent has the potential to gradually develop a level of
leads to crisis. Parameters and simple laws for the dynamics
financial accumulation are proposed and explored. It turns out
concepts from linear control systems theory, and
representation, are very useful for this exercise. It is
the problem of "exploding" debt is grave and largely ignored.
(This is a working paper).
Basel rules, endogenous money growth, financial accumulation and debt crisis (basel.pdf)
ABSTRACT: A Basel-type bank regulation regime
has the side effect of endogenous money growth. The growth
out to be inversely proportional to the required minimum
ratio. This money growth contributes to avoiding debt crises,
opposed to non-bank lending which increases debt but not money
and is therefore dangerous in the long run. Banks often prefer
loans onwards. It is shown that this doesn't only decrease the
risk, it may also imply faster asset growth for the selling
allowing an increase in the flow of new extended loans.
(In: proceedings of the 12th Path to Full Employment Conference and the 17th National Conference on Unemployment, the University of Newcastle, Australia, December 2-3, 2010)
A block diagram approach to macroeconomics, and why IS/LM is fatally flawed (system-econ.pdf)
ABSTRACT: A dynamic model of an individual, and
then an aggregate (sector), economic unit is developed. This
other building blocks are employed to create macroeconomic
represented through block diagrams. A simulation tool based on
diagram representation is applied to a simple textbook economy
firms and households. Finally, a dynamic extension of the
model is presented in block diagram form, and it is
through the dynamic extension that IS/LM's way of treating
is flawed to a degree that implies that IS/LM must be
(This is a working paper).
of a Post Keynesian model of hoarding, and an alternative
ABSTRACT: The concept of a "propensity to hoard" is frequently used by Post Keynesians and Circuitists in time-discrete models of the macroeconomy, to account for how households manage their flow of savings. This concept is argued to be erroneous -- and continuous circuit models are better than discrete for a clear understanding of this. The phenomenon of time dispersion of circulating money is discussed -- also impulse functions and first order differential equations as building blocks in a network. Finally, these components and concepts are used to assemble and simulate a circuit model with debt. Even at high interest and savings rates the system evolves without ending in debt-induced crisis.
(Journal of Economic Behavior & Organization., Vol 60/2, pp 230-251, June 2006)
Overvaluation − not volatility − is the main danger in stock markets
stock markets are volatile and expresses such traits as
psychological moods, cycles and crashes. This paper develops
explores a model which have these properties. The model is
continuous and non-linear. It is developed in stages. In the
stage it is applied to the price dynamics of one type of
Later on it is applied to a weighted price index of
to try to capture the dynamics of a stock exchange as a
purpose of the model is to gain insight both into short-term
and stability properties, and the dynamics of long-range
crashes. Based on the model, the transaction tax reform
stabilise stock markets is discussed and rejected. Another
stabilising idea is presented − substituting a stock with a
(This is a working paper.)
A fairly similar paper, built on the same model, is this:
A countercyclical fee to
eliminate long-term stock market booms and busts (stockm-fee.pdf)
(This is a working paper.)
The dynamics of long-range financial accumulation and crisis (
model of money stock/flow relations for a generic economic
developed, and employed to model and discuss the long-range
impact of returns on any form of saved or invested money on a
macroeconomy. It is shown that, subject to realistic
behavior of economic agents, a macro-economic system with
returns must eventually reach a depression-like economic
observed disproportionate growth of financial sectors in
is explained by the proposed model. Simulation runs are
indicator for economic fragility is proposed.
(In Nonlinear Dynamics, Psychology, and Life Sciences, Vol. 3 No. 2 April 1999.)
introduction on A.W. Phillips' "hydraulic" macroeconomic
given. His (and others economists') notion that a macroeconomy
reasonably be considered to have dynamics corresponding to a
order time lag transfer function, is justified in this paper
aggregation of individual micro agents. In connection with
economic application, I derive and discuss a theorem and some
general networks of time lagged blocks. Finally, Monte Carlo
simulations of networks of micro agents are undertaken,
validity of the first order time lag aggregate model.
(Modeling, Identification and Control, vol. 19 no. 4, 1998.)
Hirschman introduced the terms "voice" and "exit" to
two main means for individual influence in an organisation.
One may try
to change something by speaking up or voting for another
"voice". Or one may quit the organization "exit". As a
option is "exit" only by stopping buying a given product. Your
will never reach the corporation, or it will be ignored. This
describes a simple and cost-free reform to give consumers
"voice": free discussion pages about a corporation's products
practices by law prominently linked from its main web page and
to in its advertising. Corporations are obliged to reply and
participate. Corporations' compliance is supervised by a
(First Monday, volume 4, number 1, 1999.
For those who read Norwegian: EnHYPERLINK "http://www.aftenposten.no/meninger/kronikker/article367905.ece" utvidet versjon av denne artikkelen sto som kronikk i Aftenposten, 22. juli 2002)