Workings of A Public Money System of Open Macroeconomies by Prof. Kaoru Yamaguchi

Professor Kaoru Yamaguchi
2010 AMI Monetary Reform Conference

Workings of A Public Money System of Open Macroeconomies

– Modeling the American Monetary Act Completed –

(A Revised Version)

Kaoru Yamaguchi ∗
Doshisha Business School
Doshisha University
Kyoto 602-8580, Japan

Abstract: Being intensified by the recent financial crisis in 2008, debt crises seem
to be looming ahead among many OECD countries due to the runaway
accumulation of government debts. This paper first explores them as a
systemic failure of the current debt money system. Secondly, with an
introduction of open macroeconomies, it examines how the current system
can cope with the liquidation of government debt, and obtains that
the liquidation of debts triggers recessions, unemployment and foreign
economic recessions contagiously. Thirdly, it explores the workings of a
public money system proposed by the American Monetary Act and finds
that the liquidation under this alternative system can be put into effect
without causing recessions, unemployment and inflation as well as foreign
recessions. Finally, public money policies that incorporate balancing
feedback loops such as anti-recession and anti-inflation are introduced for
curbing GDP gap and inflation. They are posed to be simpler and more
effective than the complicated Keynesian policies.

Click here to view Prof. Yamaguchi’s powerpoint presentation at the 2010 Conference

Click here to read the paper, as presented at the 2010 conference

Click here to read the revised and updated paper, as presented at the 2011 conference

After presenting the paper with modest revisions at the AMI Monetary Reform Conference in 2010, the following award was given; “Advancement of Monetary Science and Reform Award to Prof. Kaoru Yamaguchi, Kyoto, Japan, For his advanced work in modeling the effects on national debt of the American Monetary Act”.

∗The paper was then presented at the 29th International Conference of the System Dynamics Society, Washington D.C., USA, July 25, 2011. On the following day, July 26, it was presented at the US Congressional Briefing, Cannon 402, sponsored by the Congressman Dennis Kucinich. Then, it was again slightly revised by adding comparative analyses of liquidation policies under a debt money system, and presented with the same title at the 7th Annual AMI Monetary Reform Conference in Chicago, USA, Sept. 30, 2011.


6 Responses to “Workings of A Public Money System of Open Macroeconomies by Prof. Kaoru Yamaguchi”

  1. Stuart Davies says:

    The following is in reply to a post on the yahoo groups monetary policy group in reference to Stephen Zarlenga’s dismissal of the value of public banking:

    I find that I have to side with Ellen Brown on this one, and respectfully suggest to Stephen Zarlenga that he might be overlooking an important point here. I assume we all are in complete agreement with Zarlenga that it is necessary to address the fundamental flaws inherent in fractional reserve banking, and we all understand that public banking will not do this.
    However, there is another major problem with the existing monetary system which I know that Zarlenga understands, but seems to be forgetting in this circumstance, and that is that it is PRIVATELY OWNED.
    snip snip snipety snip!
    So you see, Stephen, this is a very practical means to achieve the goal we all seek. I think it may be about the only hope we have of getting there. It is all well and good to take a purist stance and insist on full and complete reform all in one fell swoop, but do you honestly believe that is realistic? We should all concentrate on developing a workable, realistic strategy to enact the real reforms we all support. If anyone has a better plan than public banking as an intermediary step, I’m all ears.

  2. AMI says:

    Sorry Stuart, but you are misleading yourself, and others. What the misnamed public banking group ends up doing, is keeping the same vicious banking system in place that wrecked the world economies (and are still wrecking), run by the very same odious characters, using the same insane methods. That you do this at the only time when actual real reform is possible is telling us something about your judgement.

    In future try to limit the amount of words you send – its not exactly fun to read such nonsense. whether it is somehow well meaning, tricky, or merely deluded!

  3. joe bongiovanni says:

    I’m sorry that you might be under the impression that state “banking” would somehow de-privatize the monetary system. Nothing would be further from the truth. The opposite is what happens.
    Federal AND state governments ARE public users of the private monetary system in this country. State banking carried out on the BND model, where NO money is created by its financing and lending policies and programs, merely assists those private banks in ND to lend to projects where the state becomes the project lending partner.
    Public banking, again a la BND, does NOT reduce private bank lending and money-creation, it expands this paradigm.
    If, indeed, the goal we all seek is to nationalize money, there is only one route to that goal, and that is through the reform proposals of the Kucinich Bill.

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