His basic criticism is the not entirely invalid point that MMT is fine for large countries, but not so good for small ones. However, his article does have weaknesses. He says, “funding expenditure via money creation…. the ability to do so requires that the currency be safe from speculation against the exchange rate. That requires either that the national currency serve as an international medium of exchange (reserve currency) or that the government possesses substantial foreign exchange reserves.”Randy Wray addressed this criticism some time ago at New Economic Perspectives when it was still active.See MMT AND EXTERNAL CONSTRAINTS.See also at Levy Institute.Fixed and Flexible Exchange Rates and Currency SovereigntyThe balance of trade, not payments, is true measure of a deficit's
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His basic criticism is the not entirely invalid point that MMT is fine for large countries, but not so good for small ones. However, his article does have weaknesses.Randy Wray addressed this criticism some time ago at New Economic Perspectives when it was still active.He says, “funding expenditure via money creation…. the ability to do so requires that the currency be safe from speculation against the exchange rate. That requires either that the national currency serve as an international medium of exchange (reserve currency) or that the government possesses substantial foreign exchange reserves.”