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Primer: MMT Theory Of Inflation — Brian Romanchuk

Summary:
The Monetary Monopoly Model (Section 4.3) is a core model of Modern Monetary Theory. If we take it literally, we do not need a theory of inflation, since the price level in some variants of the model is explicitly set as a policy variable. However, reality is far more complex than the model suggests, and if we want to match theory to reality, we are faced with the realisation that governments act in a fashion that sabotages the control of the price level that they do have. (Note: This is an unedited draft of a section of my increasingly long MMT primer.) Bond Economics Primer: MMT Theory Of Inflation Brian Romanchuk

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The Monetary Monopoly Model (Section 4.3) is a core model of Modern Monetary Theory. If we take it literally, we do not need a theory of inflation, since the price level in some variants of the model is explicitly set as a policy variable. However, reality is far more complex than the model suggests, and if we want to match theory to reality, we are faced with the realisation that governments act in a fashion that sabotages the control of the price level that they do have.
(Note: This is an unedited draft of a section of my increasingly long MMT primer.)
Bond Economics
Primer: MMT Theory Of Inflation
Brian Romanchuk
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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