Ankara Yıldırım Beyazıt Üniversitesi

-Workshop-

"Money and Macroeconomic Modeling"

by

Kaoru Yamugchi (PhD - UC Berkeley)

(October 1-3, 2015)

Financial Crises triggered by the Lehman shock in 2008 revealed limitations of the current macroeconomic models such as Dynamic Stochastic General Equilibrium (DSGE) and econometric models. In place, a new wholistic macroeconomic modeling based on the accounting system dynamics is drawing attentions among those who are eager to seek for a new analytical method. It is developed by Dr. Yamaguchi who employs endogenous money in macroeconomic modelling and whose research interest has turned from a mainstream economics to a system dynamics modeling.

   Who is Dr. Yamaguchi?

Dr. Yamaguchi received his PhD in Economics from University of California, Berkeley in 1985. He is currently working at Japan Futures Research Center as a director. His thesis supervisor, Prof. Akerlof, got Nobel Prize in 2001. Dr. Yamaguchi, who gives courses at leading universities in USA and Japan, has been joined to World Future Studies Federation in 1986 and actively studying in this area. His working about monetary system model has been awarded by American Monetary Institute in 2010.

  What is the alternative monetary system proposed by Dr. Yamaguchi?

Fiat money as legal tender has been historically created as either public money or debt money. Current macroeconomies in many countries are built on a debt money system, which, however, failed to create enough amount of money to meet an increasing demand for growing transactions. Gold standard failed in 1930s and was replaced with gold-dollar standard after World War II, which also failed in 1971. Then current dollar standard was established, allowing free hand of creating money by central banks, from which, unfortunately, current runaway government debt has been derived. The accumulation of debt will sooner or later lead to impasses of defaults, financial meltdown or hyper-inflation; in other words current debt money system is facing its systemic failure. Under such circumstances it is shown that it becomes very costly to save the current debt money system by reducing government debt and debt-GDP ratio; that is, a liquidation process of debt inevitably triggers economic recessions and unemployment of both domestic and foreign economies.

As its alternative system that can overcome these systemic failures, a public money system is proposed as having the following three features:

        i. Governmental control over the issue of money,

        ii. Abolishment of credit creation with full (100%) reserve ratio,

       iii. Constant flow of money into circulation to sustain economic growth and welfare.

This alternative system, then, is presented as a public money system of open macroeconomies as proposed by Dr. Yamaguchi (the American Monetary Act) in which only government can issue money with a full reserve banking system. It is shown that under the public money system government debt can be liquidated without triggering recession, unemployment and inflation. Finally, in place of the current Keynesian monetary and fiscal policies, public money policies are introduced, consisting of three balancing feedback loops of anti-recession policy, anti-inflation policy and restructuring policy of step down of a head of PMA (Public Money Administration). Public money policies thus become simpler and can affect directly to the workings of the economy. Accordingly, from a viewpoint of system design, a public money system of macroeconomies as proposed by the American Monetary Act seems to be worth being implemented if we wish to avoid impasses such as defaults, financial meltdown and hyper-inflation.

   Aim of the Workshop?

This workshop is primarily intended for PhD students and academicians who interested in monetary economics and macroeconomics. However, applications of master students will be evaluated according to quotas.

This 3-day workshop offers some basic tools and techniques for building alternative macroeconomic models. It is organized for those economic researchers and graduate students who have no background of system dynamics modeling. It covers basic macroeconomic models developed in Dr. Yamaguchi’s recent book: Money and Macroeconomic Dynamics - Accounting System Dynamics Approach (http://www.muratopia.org).

Participants are requested to pre-install two free-download software: Vensim PLE and Model Reader from http://www.vensim.com. All system dynamics macroeconomic models used in the workshop are provided in the classroom.

There are two main purpose of this workshop. One of them is to give information to academicians and researchers about the system that Dr. Yamaguchi suggested and second one is to perform the feasibility of that system.

The workshop is one that the participants attend interactively to the course and informed about Dr. Yamaguchi’s system and can ask questions about Public Money System.

   Workshop Program

       Course Date: October 1-3, 2015 – ANKARA

        Course Schedule:     09.15-10.45 - Lecture

                                     10.45-11.00 - Coffee Break

                                     11.00-12.30 - Lecture

                                     12.30-13.30 - Lunch

                                     13.30-15.00 - Lecture

                                     15.00-15.30 - Coffee Break

                                     15.30-17.00 - Lecture

                 Session contents are subject to change according to the interest of participants.

   REGISTRATION (IMPORTANT)

       The workshop is free, but registration is required.

       Participants must fill out the form at link:

       Registration Form (please click)

       We will contact with you if your registration is accepted.

     Committee:

           Organization Committee:

               Mehmet Fatih Öztek (Yıldırım Beyazıt University)

               Sıdıka Başçı (Yıldırım Beyazıt University)

               Syed F. Mahmud (Bilkent University (Visiting))

          Scientific Committee:

               Erdal Özmen (Middle East Technical University)

                          Kaoru Yamaguchi (Ph.D. (UC Berkeley))

               Mesut Murat Arslan (Yıldırım Beyazıt University)

               Muhsin Kar (Yıldırım Beyazıt University)

               Nadir Öcal (Middle East Technical University)

     Course Materials

      Participants can get necessary book, articles and software program from;

      http://www.muratopia.org/Yamaguchi/MacroBook.html

      http://vensim.com/free-download/

    Notes:

     The workshop will be held at Yıldırım Beyazıt University Cinnah Campus

     Adress: Guvenevler Mah. Cinnah Cd. No:16 Cankaya / Ankara

     for location scan the QR code:

• Lunch is free during the conference (1-2-3 October).
• The accommodation will be paid by the participants.
• (We can assist for guest houses in Ankara)

      For your questions: ybueconomics@gmail.com

               Secretary:

      Bora ALTAY, boraaltay[at]gmail.com , +90 555 714 09 53

      Muhammed GÖRÜŞ, msgorus[at]ybu.edu.tr , +90 544 449 99 05

      Cem KORKUT, cem.korkut[at]hotmail.com.tr , +90 532 400 71 50

      Önder ÖZGÜR, oozgur[at]ybu.edu.tr , +90 505 656 77 84

      Bünyamin YİĞİT, byigit[at]ybu.edu.tr , +90 507 899 51 88