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Clint Ballinger — MMT & the Fourth Spark Plug: Descriptive vs. Prescriptive revisited

Summary:
Clint Ballinger uses an automotive analogy to show how MMT is not so much a matter of changing policy as much as it is of using the full power of currency sovereign. Then the self-induced limitations on using the full capacity of fiscal space disappear automatically. The mistake is largely due to the erroneous government as firm or household analogy. A sovereign currency issuer is not limited in the amount of currency it can issue, unlike currency users that must obtain the currency. The constraint limiting issuance by a currency sovereign is the availability of real resources including the ability of the economy of the currency zone to meet demand in markets by expanding supply.Clint BallingerMMT & the Fourth Spark Plug: Descriptive vs. Prescriptive revisited

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Clint Ballinger uses an automotive analogy to show how MMT is not so much a matter of changing policy as much as it is of using the full power of currency sovereign. Then the self-induced limitations on using the full capacity of fiscal space disappear automatically.

The mistake is largely due to the erroneous government as firm or household analogy. A sovereign currency issuer is not limited in the amount of currency it can issue, unlike currency users that must obtain the currency. The constraint limiting issuance by a currency sovereign is the availability of real resources including the ability of the economy of the currency zone to meet demand in markets by expanding supply.

Clint Ballinger
MMT & the Fourth Spark Plug: Descriptive vs. Prescriptive revisited

Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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