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"It is therefore not applicable in all nations." It's applicable to all nations. You could have a currency that is specifically for this job. As long as you re
by neilwilson 7y ago
"It is therefore not applicable in all nations."
It's applicable to all nations. You could have a currency that is specifically for this job. As long as you remember to tax it out of existence at the other end.
"This step necessarily requires discretion on the part of the central bank. "
The process in the UK is straightforward. It follows the existing Universal Credit system. The indidividual presents themselves at the local Job Centre, the Job Centre signs them up and allocates them as local democracy dictates to jobs in the area (whether working for local councils, or local charities as the municipality dictates). The job program signs off timesheets which are filed with the UC programme, and then the UC is paid - directly by the central bank. Rather than a 'Treasury' account, you use a 'Job Guarantee' account to charge the bill to. Other than than the process is the same.
"The Federal Reserve bank has a dual mandate of stable, low inflation and low unemployment. "
Which it is failing to keep. Central banks without employment targets have high unemployment - particularly if government is constrained.
"There are other automatic stabilizers that can be implemented independent of the central bank."
Not and allow a balanced budget provision at the same time.
"Global lending has been distorted since 2008 due to the Federal Reserve's interest on excess reserves policy"
Without that central interest rates would be zero. The natural rate of interest is zero in the interbank - as any banker will tell you. Central banks interfere in the market to raise rates.
Reserves have no control function over bank lending. At all. Ever.
And anyway that misses the point. Bank lending takes time, which as any student of dynamic systems knows introduces unstable harmonics into the response function. The reaction is precisely the same as trying to stabilise a skidding car with a steering wheel. Get too big a skid and you can't counter it because you can't respond fast enough. Then the car crashes.