Ep131[2/3,5/6] John Harvey on exchange rates and neoclassicism [guest host: Johnathan Wilson]

Activist #MMT - podcast

Welcome to episode 131 of Activist #MMT. Today's part five of a six-part series with Texas Christian University (TCU) economics professor and Cowboy Economist John Harvey. Parts four through six are also the first main interview of Activist #MMT hosted by someone other than me. Today's guest host is my own former guest, MMT researcher, Texas lawyer, and pmpecon.com author, Jonathan Wilson. Jonathan and I spoke in episodes 106 and 107.

(A list of the audio chapters in this episode can be found at the bottom of this post. Here's a link to part one in this six-part series with John, which contains a link to all other parts. For a link to every Activist #MMT interview with John – plus the full audio of every Cowboy Economist video – go here.)

Today in part five, they continue their conversation regarding exchange rates from different points of view and in different contexts. In the second half, John gives his extended thoughts on a recent critique of MMT by Drumetz and Pfister. Next week, they focus on some of the core assumptions and ideology of mainstream economists. They also discuss how some assume inflation to always caused by too much demand and too high wages, despite clear empirical evidence that it's caused by something else.

You'll find links to many resources, as mentioned by John and Jonathan throughout these three parts, in the show notes to part four, which is the first with Jonathan.

But for now, let's get right back to Jonathan's conversation with John Harvey. Enjoy.

Audio chapters

• 5:19 - Currency markets are driven by financial capital flows, not trade flows.
• 8:27 - "I feel like a liar when I talk about the mainstream theories of exchange rate."
• 11:35 - How crises made it into John's textbook and class
• 13:44 - 1990's Mexican and East Asian currency crises
• 17:38 - If Mexico had more advanced industry at the time of the crisis, could it have done differently? (Brazil and capital controls)
• 20:58 - Ilene Grabel's books and concepts
• 22:17 - Russian interest rates and hot money, versus unsustainable returns for crypto
• 25:27 - The game of musical chairs
• 28:37 - Turkey and becoming stuck with short-run strategies
• 30:55 - Is it harder to build a cold money economy, or boot out the IMF from a hot money economy?
• 34:45 - Barney Miller and revolution, and bouncers who check facial structure
• 38:52 - Jamie Galbraith's bi-annual conference at the university of Texas
• 40:12 - Drumetz and Pfister MMT critique - the setup
• 41:20 - How John learned about MMT
• 44:17 - Initial comments on Drumetz and Pfister- tone and rhetoric
• 46:15 - Drumetz and Pfister- unstated assumptions
• 47:16 - Drumetz and Pfister- what they get right about MMT (and try to present as an indictment)
• 54:20 - "MMT doesn't do any formal modeling" - General equilibrium modeling
• 56:30 - Simultaneous equations can't model time
• 1:10:39 - What if the price of diamond jewelry goes up? Should we care?
• 1:15:27 - Duplicate of introduction, with no background music (for those with sensitive ears)