by 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:
Matias Vernengo writes Elon Musk (& Vivek Ramaswamy) on hardship, because he knows so much about it
Lars Pålsson Syll writes Klas Eklunds ‘Vår ekonomi’ — lärobok med stora brister
New Economics Foundation writes We need more than a tax on the super rich to deliver climate and economic justice
Robert Vienneau writes Profits Not Explained By Merit, Increased Risk, Increased Ability To Compete, Etc.
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.