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
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.
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.