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Saturday, 16 January

23:24

Doubling of renewables will add $A1.9 trillion to global economy by 2030 Renew Economy

Australia could be among major beneficiaries of doubling of renewable energy that could deliver $A1.9 trillion in added economic growth by 2030. Renewables would also boost jobs, cut pollution, increase energy security, reduce costs and save water.

16:56

Provocation John Quiggin

We’ve had a series of fatal and near-fatal one-punch assaults in Queensland recently, several captured on CCTV. An even worse case, except that by pure luck the victim managed to put out his hands and avoid a severe head impact was shown recently. One attacker holds the victim to let a second punch him, after which the first (much bigger) attacker delivers a “king hit” and walks off.

What shocked me about this was the alleged attacker’s lawyer, who claimed that he might have a defence of “provocation”. This medieval defence was scaled back after it was used, successfully, by a man who beat his girlfriend to death with a steering wheel lock in 2005 as a result of jealousy, but it apparently remains available to street thugs whose attacks don’t cause grievous bodily harm.

When combined with recent “one-punch” laws, the result is an absurdity. A thug who throws a punch in response to an insult* can’t predict what will happen next. If the victim falls the wrong way and dies, it’s a mandatory 15-year minimum. But if the victim is lucky, so is the thug – he can get off scot-free, or nearly so, with a defence of provocation.

Regrettably, but predictably, the Queensland Law Society has sought to maintain this barbaric defence at every stage. The Law Society’s determination to keep every possible defence open, no matter how anachronistic, undermines more reasonable concerns they have raised with respect to issues such as mandatory minimum sentences.

* Actual or claimed

16:00

The Weekend Quiz – January 16, 2016 – answers and discussion Bill Mitchell – billy blog

Here are the answers with discussion for The Weekend Quiz. The information provided should help you work out why you missed a question or three! If you haven’t already done the Quiz from yesterday then have a go at it before you read the answers. I hope this helps you develop an understanding of Modern Monetary Theory (MMT) and its application to macroeconomic thinking. Comments as usual welcome, especially if I have made an error.

Question 1:

When the government matches an increase in deficit spending with debt issued to the private sector, the growth in aggregate demand is less than would be the case if the government didn’t borrow at all.

The answer is False.

The mainstream macroeconomic textbooks all have a chapter on fiscal policy (and it is often written in the context of the so-called IS-LM model but not always).

The chapters always introduces the so-called Government Budget Constraint that alleges that governments have to “finance” all spending either through taxation; debt-issuance; or money creation. The writer fails to understand that government spending is performed in the same way irrespective of the accompanying monetary operations.

The textbook argument claims that money creation (borrowing from central bank) is inflationary while the latter (private bond sales) is less so. These conclusions are based on their erroneous claim that “money creation” adds more to aggregate demand than bond sales, because the latter forces up interest rates which crowd out some private spending.

All these claims are without foundation in a fiat monetary system and an understanding of the banking operations that occur when governments spend and issue debt helps to show why.

So what would happen if a sovereign, currency-issuing government (with a flexible exchange rate) ran a fiscal deficit without issuing debt?

...

03:25

Should Japan Fear China’s Stock Market Crash This Time? The Diplomat » Pacific Money

Will China's 2016 stock market woes have more impact on Japan than in 2015?

00:09

Jakarta Attacks Hit Vulnerable Target The Diplomat » Pacific Money

Thursday’s attacks could have some significant economic implications.

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Wednesday, 13 January

21:15

Alarm Bells Ringing For Emerging Markets The Diplomat » Pacific Money

Analysts are warning of tougher times ahead for the region.

Friday, 08 January

12:00

Saturday Quiz – January 9, 2016 Bill Mitchell – billy blog

Welcome to the Billy Blog Saturday Quiz. The quiz tests whether you have been paying attention over the last seven days. See how you go with the following questions. Your results are only known to you and no records are retained.

Please go to Saturday Quiz – January 9, 2016 to view the quiz

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