Summary:
Stephanie Kelton in Bloomberg responds to Krugman in the NY Times. One final point. Krugman says there is an inherent tradeoff between fiscal and monetary policy. I agree, but not with the tradeoff he describes. Deficits don’t automatically drive interest rates higher, and higher interest rates don’t automatically translate into lower private spending. That tradeoff is disputed, and not just by MMTers. The tradeoff that matters is the one that Hyman Minsky and James K. Galbraith have highlighted. Monetary policy “works” by driving people into debt. Fiscal policy works by driving income into people’s pockets. https://www.bloomberg.com/opinion/articles/2019-03-01/paul-krugman-s-four-questions-about-mmt
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
Stephanie Kelton in Bloomberg responds to Krugman in the NY Times.Stephanie Kelton in Bloomberg responds to Krugman in the NY Times. One final point. Krugman says there is an inherent tradeoff between fiscal and monetary policy. I agree, but not with the tradeoff he describes. Deficits don’t automatically drive interest rates higher, and higher interest rates don’t automatically translate into lower private spending. That tradeoff is disputed, and not just by MMTers. The tradeoff that matters is the one that Hyman Minsky and James K. Galbraith have highlighted. Monetary policy “works” by driving people into debt. Fiscal policy works by driving income into people’s pockets. https://www.bloomberg.com/opinion/articles/2019-03-01/paul-krugman-s-four-questions-about-mmt
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
Bill Haskell writes Promoting the General Welfare, The Supreme Court’s Version of Doing So
NewDealdemocrat writes For the second time in three months, the Household jobs Survey was recessionary
Angry Bear writes Medicare Payment Advisory Commission report to Congress Brief
Angry Bear writes Western “Values”
One final point. Krugman says there is an inherent tradeoff between fiscal and monetary policy. I agree, but not with the tradeoff he describes. Deficits don’t automatically drive interest rates higher, and higher interest rates don’t automatically translate into lower private spending.
That tradeoff is disputed, and not just by MMTers. The tradeoff that matters is the one that Hyman Minsky and James K. Galbraith have highlighted. Monetary policy “works” by driving people into debt. Fiscal policy works by driving income into people’s pockets.