Reinventing Functional Finance

Edited by Edward J. Nell and Mathew Forstater

in Books from Edward Elgar Publishing

Abstract: This ambitious book seeks both to revive and revise the idea of ‘functional finance’. Followers of this doctrine believe that government budgets should concentrate solely on their macroeconomic impact on the economy, rather than reflecting a concern for sound finance and budgetary discipline. Reinventing Functional Finance examines the origins of this idea and then considers it in a modern context. The authors explore the concept of NAIRU and argue that modern economies can operate at the level of full employment without provoking unmanageable inflation. They also contend that budget deficits do not have the deleterious effects commonly ascribed to them; the belief that they do rests on a misunderstanding of modern money. In this context, they highlight the relevance of Abba Lerner’s famous dictum, ‘money is a creature of the State’. The authors also debate the merits of various proposals for ‘Employer of Last Resort’ programs, which combine automatic stabilizers with the buffer stock principle.

Keywords: Economics and Finance (search for similar items in EconPapers)
JEL-codes: B5 (search for similar items in EconPapers)
Date: 2003
ISBN: 9781843761112
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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Chapters in this book:

Ch 1 Transformational Growth and Functional Finance

Edward J. Nell

Ch 2 Functional Finance, New Classical Economics and Great-Great Grandsons

David Colander

Ch 3 Toward a New Instrumental Macroeconomics: Abba Lerner and Adolph Lowe on Economic Method, Theory, History and Policy

Mathew Forstater

Ch 4 Neisser's Unorthodox Quantity Theory of Money

Hans-Michael Trautwein

Ch 5 Functional Finance, Past and Present

Perry Mehrling

Ch 6 The NAIRU and Fiscal and Monetary Policy for Now and Our Future: Some Comments

Robert Eisner

Ch 7 The History of Abba Lerner's Supply-side Inflation

Lynn Turgeon

Ch 8 Functional Finance and Fiscal Function

Richard A. Musgrave

Ch 9 Are These Trade-offs Necessary?

James S. Duesenberry

Ch 10 Functional Finance and US Government Budget Surpluses in the New Millennium

L. Randall Wray

Ch 11 Functional Finance and Full Employment: Lessons from Lerner for Today

Mathew Forstater

Ch 12 Anchors Aweigh: From Real to Nominal Money and from Market to Government Stabilization

Edward J. Nell

Ch 13 Interest Rates, Profits and Economic Growth

John Smithin

Ch 14 Equality and Enterprise: Can Functional Finance Offer a New Historical Compromise?

Per Gunnar Berglund

Ch 15 The Operational Role of Functional Finance for Labor Market Behavior and Outcomes

Ingrid H. Rima

Ch 16 The Job Guarantee: Full Employment and Price Stability in a Small Open Economy

William F. Mitchell

Ch 17 Short-run Macroeconomic Stabilization by an Employer of Last Resort

Edward J. Nell

Ch 18 Transformational Growth Project Members and Conference Participants in Open Conversation

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