Raghuram Rajan, the quintessential central banker-professor, is back. Explains the process and consequences of monetisation in detail in a LinkedIn post. “Monetisation Is Neither A Game Changer Nor A Catastrophe.” His views explained below 👇🏽 bloombergquint.com/coronavir…

Chapter 4: "The Effects of Modern Monetary Theory on the Structure of Production" by @DrPatrickNewman "This chapter analyzes the debt monetization proposals of MMT from an Austrian structure-of-production perspective. It shows that debt monetization raises societal time preferences and reduces the number of higher-order stages in the economy, leading to a higher interest rate, lower economic growth, and increased prices of consumer goods." - p. 92 Indeed, this is something most other schools of thought miss. Government spending doesn't simply add to "aggregate demand." It changes the allocation of scarce resources throughout the structure of production, redirecting labor and capital away from the production of goods and services that consumers want and need. But first, Dr. Newman makes an important point: Government spending is consumption, not investment. "It is impossible for governments to produce goods with the expectation of earning interest or profits, which means it is impossible for them to invest in the catallactic sense." - p. 95 Why? Because government revenues are disconnected from voluntary exchange. Unlike private businesses, governments don't have to earn profit by producing goods and services that consumers value more highly than the resources used to produce them. The result? "The monetary return cannot genuinely be calculated, meaning that factors of production will tend to be inefficiently used." - p. 96 One particularly interesting part of this chapter is Dr. Newman's discussion of how government spending came to be included in national output statistics in the first place. Even Simon Kuznets, the pioneer of national income accounting, recognized the problem with including government spending. Newman shares Kuznets's concerns: “Then, there is the related problem that while the ‘charges for the services rendered by industry to consumers . . . are established on a comparatively free market. . . . the charges by the government to business units and to individuals are not established on the free market, since the government has the right to and does tax, not in accordance with services rendered but in accordance with ability to pay’" - p. 100 If the government spends $1 billion to provide some service people don’t want, the full $1 billion still gets counted in GDP. Then Dr. Newman gets into the effect of government spending on the structure of production. Since it is properly counted as consumption, not investment, government spending shifts the use of resources toward a shorter and steeper structure of production. "The result of the shorter and steeper structure is a reduction in the amount of capital goods created in the higher orders, which translates into fewer capital goods in the lower orders and eventually a decrease in consumer goods." - p. 110 And here's the point MMTers need to grapple with: Kelton and other MMTers say there’s no crowding out problem, and that inflation is the real constraint on government spending, but… "Even if taxes and contractionary monetary policy limit the effects of debt monetization on total spending, the result still raises the prices of consumer goods by diverting capital goods from marketplace production and wasting them in the government sector." - p. 111 Furthermore, without the profit-and-loss test, how can government officials know that they're allocating resources to more valuable uses rather than less valuable ones? Read the full chapter here: mises.org/library/book/anti-…

BREAKING NEWS The Royal Swedish Academy of Sciences has decided to award the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Robert E. Hall and Michael Woodford “for microeconomic foundations of macroeconomic stabilisation.” #NobelPrize

बांग्लादेश ने भारत को प्रति व्यक्ति GDP के मामले में पछाड़ दिया है। बांग्लादेश की प्रति व्यक्ति GDP 2,886 डॉलर है, वहीं भारत की 2,749 डॉलर है। 2014 में जब मोदी PM बने थे, तब बांग्लादेश प्रति व्यक्ति GDP के मामले में भारत से बहुत पीछे था। तब भारत की प्रति व्यक्ति GDP 1,554 डॉलर थी और बांग्लादेश की सिर्फ 1,094 डॉलर थी। लेकिन मोदी ने अपनी खराब आर्थिक नीतियों से सब बर्बाद कर दिया। आज बांग्लादेश भी हमसे आगे निकल गया। मोदी ने वादा अच्छे दिनों का किया था, लेकिन जनता को मिले तो सिर्फ बुरे दिन।

BREAKING NEWS The Royal Swedish Academy of Sciences has decided to award the 2026 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel to Robert E. Hall and Michael Woodford “for microeconomic foundations of macroeconomic stabilisation.” #NobelPrize

On the International Day of Rural Women, I salute the courage, resilience and enterprise of our rural women, who strengthen our farms, sustain our families and drive our villages forward. Their contribution deserves not just recognition, but sustained opportunities, economic independence and dignity. Under the leadership of Hon’ble Prime Minister Shri @narendramodi Ji, initiatives such as DAY-NRLM and Lakhpati Didi are creating pathways for rural women to build sustainable livelihoods and increase their incomes. The implementation of VB-G RAM G further strengthens the framework for rural employment and durable village assets. Our coalition government in Andhra Pradesh is committed to creating meaningful opportunities for rural women through self-help groups, livelihood generation, entrepreneurship and stronger village infrastructure. Our focus is on enabling every rural woman to turn her skills and hard work into lasting prosperity. When a rural woman gains economic strength, an entire family gains security, a village gains momentum and the nation moves closer to inclusive development. Let us invest in rural women’s skills, enterprises and leadership, expand access to finance and markets, and work together to build an inclusive future in which every rural woman has the opportunity to prosper. - @PawanKalyan #InternationalDayOfRuralWomen #WomenEmpowerment #RuralDevelopment

Finally, ECI agrees to provide a soft copy of the final electoral rolls in a readable format to political parties. Several political parties had requested ECI for a soft copy of electoral rolls in a readable format and Congress even moved SC in 2018 requesting the same but ECI opposed it.

When CJP was granted permission to protest, many were quick to float conspiracy theories that we were planted by the BJP. Yesterday, the INDIA bloc held a massive protest, but there was no crackdown like the one we witnessed on October 10. This is exactly how the govt plays us against each other. By treating different protests differently, they create suspicion and mistrust among people who are ultimately fighting for the same cause. My only request to everyone is to see through these tactics. Today, they may allow one protest and crush another. Tomorrow, they could reverse the roles. The idea is to keep us doubting each other instead of questioning those in power. Don’t let conspiracy theories divide us. Don’t fall into the trap of fighting among ourselves when we should be standing together. The fight is against Gyanesh Kumar and those protecting him. Don’t lose sight of that.