by Françoise Drumetz and Christian Pfister have enlivened us with a new Banque de France working paper “The Meaning of MMT.” I have read a lot of critiques of Modern Monetary Theory (MMT) over the years, and summarised what I saw as the reasonable critiques in a chapter in my latest book, “Modern Monetary Theory and the Recovery.” The Drumetz and Pfister article is somewhat novel in its approach when compared to the fairly dismal track record of earlier neoclassical critiques, but the conclusions were preordained (spoiler: MMT is bad).The first immediate disclaimer to note that although this was a working paper published by the French central bank, the views in the paper are supposed to represent the authors, and not the institution. Although anyone familiar with the economics research scene
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Françoise Drumetz and Christian Pfister have enlivened us with a new Banque de France working paper “The Meaning of MMT.” I have read a lot of critiques of Modern Monetary Theory (MMT) over the years, and summarised what I saw as the reasonable critiques in a chapter in my latest book, “Modern Monetary Theory and the Recovery.” The Drumetz and Pfister article is somewhat novel in its approach when compared to the fairly dismal track record of earlier neoclassical critiques, but the conclusions were preordained (spoiler: MMT is bad).Bond EconomicsThe first immediate disclaimer to note that although this was a working paper published by the French central bank, the views in the paper are supposed to represent the authors, and not the institution. Although anyone familiar with the economics research scene grasps this, people less familiar with the research business might phrase this as “the French central bank says…,” which is an overstatement.
Very simply, I am annoyed by this paper. My problem with it is straightforward: the authors are simultaneously condescending and quite often totally out to lunch. As Texans (allegedly) say, they are “all hat and no cattle.” It is incorrect to say that everyone with a neoclassical education is simultaneously condescending and wrong, but my personal experience is that they are well over-represented in that demographic.
One of the reasons I left academia was that I was an old school hard ass when it came to rigour, and that did not fit our changing times. This paper has a thin veneer of scholarship but underneath it is filled with what can only be described as bullshit (using the technical term from the philosophy of science)....
"The Meaning Of MMT" (Yeah, Sure)
Brian Romanchuk