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The Weekend Quiz – November 12-13, 2022 – answers and discussion

Here are the answers with discussion for this Weekend’s 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.

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    The Weekend Quiz – November 12-13, 2022

    Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

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      The Australian government ignores the cost-of-living crisis impoverishing vulnerable citizens

      Today, we have a guest blogger in the guise of Professor Scott Baum from Griffith University who has been one of my regular research colleagues over a long period. He indicated that he would like to contribute occasionally and that provides some diversity of voice although the focus remains on advancing our understanding of Modern Monetary Theory (MMT) and its applications. Today he is going to talk about the current concerns about the cost-of-living crisis in Australia. Anyway, over to Scott …

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        If its bad it must be because of Brexit or MMT or both depending

        There is no doubt that the on-going pandemic has left a trail of economic problems including major supply constraints, the growing problem of long Covid and other issues that are challenging policy makers. They have been exacerbated by the behaviour of OPEC+ and the Ukraine situation. We now have a period of inflation, real wage cuts and most central banks doing their best to make matters worse. However, we now have a phenomenon that goes like this. In the UK, everything ‘bad’ that arises is apparently because of Brexit even if the trends were there before the move or the problems are being shared across all countries. I imagine even if the English cricket team loses it is because of Brexit. This phenomenon has generalised however. Now, we have the claim that all bad economic news is because governments ‘followed’ MMT or something akin to it. Those who are insecure about MMT because it does better at explaining the real world than the mainstream theories are the same as the Remainers who predicted that the British economy would crash badly in 2017 and then every year after that. To soothe their worried souls they consider any ‘bad’ news to be because of ‘MMT’ or in the case of Britain because of Brexit. Neither proposition has any foundation.

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          Kyoto Report No 5

          This Tuesday report will provide some insights into life in Kyoto for a westerner in the age of Covid. Today we discuss food and music.

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            US labour market – shows further signs of slowing

            Last Friday (November 4, 2022), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – November 2022 – which suggested that the US labour market showed signs of slowing further, with payroll employment growing by just 261,000 net jobs. The labour force measure showed employment and labour force growth turning negative as the participation edged down. The result was that the official unemployment rate rose by 0.1 points to 3.7 per cent. There are also no fundamental wage pressures emerging at present to drive any further inflation spikes. Wages growth appears to be reactive to inflation rather than propelling it. Wages growth appears to be reactive to inflation rather than propelling it. The claim that wage pressures are now pushing inflation is untenable given the data.

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              The Weekend Quiz – November 5-6, 2022 – answers and discussion

              Here are the answers with discussion for this Weekend’s 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.

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                The Weekend Quiz – November 5-6, 2022

                Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

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                  Degrowth, deep adaptation, and skills shortages – Part 5

                  This is Part 5 of an on-going series I am writing about the issues facing societies dealing with climate change and other elements which come together as a poly crisis. The series will unfold as I research and think about the topic more through my Modern Monetary Theory (MMT) lens. Today, I am concluding the analysis of the questions relating to the ageing society and the resulting skill shortages, that the mainstream narrative identifies as key ‘problems’ facing governments across the Western world. Like any issue, the way the ‘problem’ is constructed or framed influences the conclusions we come up with. Further, the tools use to operationalise that construction also influence the scope and quality of the analysis and the resulting conclusions. As I explained in Monday’s blog post – Degrowth, deep adaptation, and skills shortages – Part 4 (October 31, 2022) – the use of mainstream macroeconomics fails to deliver appropriate policy advice on these questions. But further, when we introduce multi-dimensional complexity – such as degrowth to the ageing society issue – the mainstream approach becomes catastrophic. MMT is a much better analytical framework for drilling down to see what the essential problem is and what are non-problems and thus creating the questions and answers that lead to sound policy. Today, I show why the existence of skills shortages really provides us with the space to pursue a degrowth strategy while not causing material standards of living to collapse. They are better seen as indicator of what is possible rather than a macro problem.

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