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Brian writes: The rest of the John Quiggin article discusses how MMT is a continuation of existing Keynesian theory (at least Old and Post-Keynesian theory). Note that this is actually what MMTers themselves have said. I think it is necessary to emphasize here that "continuation" doesn't mean just "repetition," lest anyone miss it. MMT economists have observed the principle, "Imitate and innovate." MMT is not just a rehash. While MMT economists draw on the past and develop their position based on it, at last to some extent, MMT economists would also point to other influences such as institutionalism and a great deal of MMT has to do with understanding institutional arrangements that affect economics, money & banking, and finance. This is a contribution, even though it has been
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Brian writes: The rest of the John Quiggin article discusses how MMT is a continuation of existing Keynesian theory (at least Old and Post-Keynesian theory). Note that this is actually what MMTers themselves have said. I think it is necessary to emphasize here that "continuation" doesn't mean just "repetition," lest anyone miss it. MMT economists have observed the principle, "Imitate and innovate." MMT is not just a rehash. While MMT economists draw on the past and develop their position based on it, at last to some extent, MMT economists would also point to other influences such as institutionalism and a great deal of MMT has to do with understanding institutional arrangements that affect economics, money & banking, and finance. This is a contribution, even though it has been
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Brian writes: The rest of the John Quiggin article discusses how MMT is a continuation of existing Keynesian theory (at least Old and Post-Keynesian theory). Note that this is actually what MMTers themselves have said.I think it is necessary to emphasize here that "continuation" doesn't mean just "repetition," lest anyone miss it. MMT economists have observed the principle, "Imitate and innovate." MMT is not just a rehash.
While MMT economists draw on the past and develop their position based on it, at last to some extent, MMT economists would also point to other influences such as institutionalism and a great deal of MMT has to do with understanding institutional arrangements that affect economics, money & banking, and finance. This is a contribution, even though it has been mentioned in the past by others, James Tobin and Hyman Minsky come to mind, but not in the same comprehensive way as the basis for a macroeconomic theory.
Not only have MMT economists brought new material to the discussion but also elaborated a synthesis of old and new that provides a new lens through which to view economics and finance, which are joined at the hip according to MMT. The juncture between economics and finance is accounting and money & banking. Even if one argues that there is nothing "new" in MMT, the synthesis they elaborate and the lens it makes available are significant innovations.
Warren Mosler would observe further that he was the first to point out that currency sovereigns have a monopoly on the currency in a floating rate system, which enables them to set the "own rate" (policy rate) and to set the value of the currency through the prices they pay in the marketplace.
For example, a job guarantee that sets the compensation for an hour of unskilled labor would establish a real anchor for the currency in terms of units of labor time (hourly rate) and labor power (unskilled).
I also think that John Quiggin "doth protest too much" about "vulgar MMT." (I have concerns here, too, and try to make corrections from time to time on social media, but that hole is just too big to plug. Also considerable background is needed to capture the nuance.)
But kudos for John Quiggin for acknowledging MMT economists actual contributions. Another sign of progress.
Bond Economics
Bond Economics
Comments On John Quiggin's "Motte and Bailey" Complaint
Brian Romanchuk
Brian Romanchuk