by Summary:
Some specifics about the MMT position on addressing inflationary pressure based on analysis of relevant causal factors — albeit without details owing to the scope of a post. For example, there are demand side reasons for rising inflationary pressure and also supply side. Stephanie Kelton claims that the predominant causal factors now are supply side and so addressing the issue from side of demand is the wrong approach, whereas expanding supply where there are shortfalls and bottlenecks is the way to go.Raising taxes to fight inflation is a single-variable approach based on addressing the demand side and as such it is simplistic. "Raising taxes" is not the preferred MMT solution to inflation although in some cases it is indicated. When it is, then the specifics of tax policy to reduce
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Mike Norman considers the following as important:
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Some specifics about the MMT position on addressing inflationary pressure based on analysis of relevant causal factors — albeit without details owing to the scope of a post. For example, there are demand side reasons for rising inflationary pressure and also supply side. Stephanie Kelton claims that the predominant causal factors now are supply side and so addressing the issue from side of demand is the wrong approach, whereas expanding supply where there are shortfalls and bottlenecks is the way to go.Some specifics about the MMT position on addressing inflationary pressure based on analysis of relevant causal factors — albeit without details owing to the scope of a post. For example, there are demand side reasons for rising inflationary pressure and also supply side. Stephanie Kelton claims that the predominant causal factors now are supply side and so addressing the issue from side of demand is the wrong approach, whereas expanding supply where there are shortfalls and bottlenecks is the way to go.Raising taxes to fight inflation is a single-variable approach based on addressing the demand side and as such it is simplistic. "Raising taxes" is not the preferred MMT solution to inflation although in some cases it is indicated. When it is, then the specifics of tax policy to reduce
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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Raising taxes to fight inflation is a single-variable approach based on addressing the demand side and as such it is simplistic. "Raising taxes" is not the preferred MMT solution to inflation although in some cases it is indicated. When it is, then the specifics of tax policy to reduce demand become crucial.
While she doesn't address it specifically, a systems approach is called for. "The economy" is embedded in a socio-economic system and this means that the issues involved in economics are not purely economic but include the social and political, which brings in values and involves ideology in addition to purely economic considerations. Therefore, "show me the bill" to be submitted to the legislature for a vote becomes more important than "show me the (economic) model."
The Lens
Should We Be Raising Taxes to Fight Inflation?
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders