Date: Mon, 11 Aug 2003 14:06:16 -0500 From: "Wray, Randall" <[EMAIL PROTECTED]> Subject: RE: Question 2
bill no, you still don't have it. size of govt is not relevant. the balance is arbitrary. once established, any deviation means there has been a reserve effect. ------- [reply] Yes, but again I thought that's what I said. I think we are in agreement on this point. Any deviation means there has been a reserve effect. But if there is in fact a continuous balance of 5 billion or whatever there has been no reserve effect. If I understand the argument, deficit spending in HPM is from Treasury's account at the Fed. Prolonged deficit spending should be reflected in an increasingly negative balance or overdraft to Treasury's account. You should see almost an exact correspondence between deficits and surpluses and credits and debits to Treasury's account (factoring the foreign sector from the equation). We had prolonged deficits and then surpluses for a while and now we're back to deficits. That should be reflected by the changing balance in the account almost exactly. During prolonged deficits the account should be going increasingly negative. During surpluses it should be going positive. Does it? It either does or it doesn't which is an empirical question. It should be answerable from the actual numbers. I think the theory stands or falls on what the numbers show (I will find out what they do show once I find time to research the matter hopefully in the next few days). If it doesn't stand or fall on that please tell me what I have missed. Please tell me soon so I don't waste my time looking for the irrelevant numbers. -- evidence? well, the fed hits its overnight target. show me a 2-3 month stretch in which fed has not hit its target--that would be evidence that fed and treas don't coordinate activities. randy ------- [reply] It could merely mean that the Fed has the monopoly of HPM like everyone thought, in which case it wouldn't need coordination because Treasury's fiscal policy has no effect on HPM. Bill -- --------- Original Message --------- DATE: Mon, 11 Aug 2003 14:06:16 From: "Wray, Randall" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]>,<[EMAIL PROTECTED]>,<[EMAIL PROTECTED]>,<[EMAIL PROTECTED]> Cc: >bill >no, you still don't have it. >size of govt is not relevant. the balance is arbitrary. once established, any >deviation means there has been a reserve effect. > >evidence? well, the fed hits its overnight target. show me a 2-3 month stretch in >which fed has not hit its target--that would be evidence that fed and treas don't >coordinate activities. > >randy > > ____________________________________________________________ Get advanced SPAM filtering on Webmail or POP Mail ... Get Lycos Mail! http://login.mail.lycos.com/r/referral?aid=27005 --^---------------------------------------------------------------- This email was sent to: [EMAIL PROTECTED] EASY UNSUBSCRIBE click here: http://topica.com/u/?a84IaC.bcVIgP.YXJjaGl2 Or send an email to: [EMAIL PROTECTED] TOPICA - Start your own email discussion group. FREE! http://www.topica.com/partner/tag02/create/index2.html --^----------------------------------------------------------------
