Tag Archives: MMT critics

Milton Ezrati gets some of it, misses on other of it.The National InterestUsing Modern Monetary Theory to Your Advantage Milton Ezrati | contributing editor at the National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and chief economist for Vested, the New York-based communications firm

Some fans of MMT have cited Japan as a success case, saying Tokyo has been able to boost fiscal spending without causing inflation as the central bank keeps the government's borrowing cost ultra-low through its massive stimulus programme.  Kuroda said Japan was not resorting to MMT, as the government commits to getting the country's fiscal house in order. "Japan has deployed economic stimulus policies. But the government believes it's important to restore fiscal health and make fiscal...

The 14 Republicans on the committee, including ranking member Steve Womack of Arkansas, are seeking a “hearing on the fiscal and economic implications of Modern Monetary Theory," according to a letter they addressed to the panel’s chairman, John Yarmuth, a Democrat from Kentucky. The school of thought, known as MMT, says that countries printing their own currency don’t have to worry as much about budget deficits because they can’t go broke. “The debate over the validity of this...

Mr Davies’s attempt to caricature MMT falls flat. No MMT advocate supports spending beyond full capacity. All MMT advocates recognise that constraints exist. Any suggestion that they don’t is purely misrepresentation. It is true that MMT is no panacea. It provides a description of how the monetary system works. It highlights policy opportunities but points to constraints; for countries with their own currencies these constraints are real and not, as Mr Davies and his mainstream colleagues...

The way in which Modern Monetary Theory (MMT) has become politicised and misrepresented is quite something. The critics have all fallen into the same pattern. They rehearse a few statements that they claim represents what MMT is about, and, which they know will shock people who read and/or listen to them to conclude that the proponents of MMT understandings are crazy. A whole host of wannabees are now jumping on the bandwagon. And last week, 5 Republican Senators in the US Congress tabled a...

I had this letter in the FT this morning in response to a piece from Gavyn Davies, which continued the standard neoclassical economist's tradition of entirely missing the point about modern monetary theory…. Tax Research UKIn the FT this morning: modern monetary theory is the answer to the new normal Richard Murphy | Professor of Practice, International Politics, School of Social Sciences, City, University of London; Director, Corporate Accountability Network; Co-founder, Green New Deal...

Worthwhile article on MMT owing to the questions it poses. Not that MMT economists haven't addressed some of these questions. But I believe that some are still hanging. It also observes that an MMT-based world run on functional finance would look quite different from the conventional world of "sound money," especially with a Green New Deal in the offing to address the emerging challenges of global inequality of distribution and the threat of climate change. What does this imply socially,...

This article explains the ISLM view of MMT in some detail without being overly wonkish for general accessibility. While it is sympathetic to MMT, it is still wrong, but instructively so. Assumptions die hard.Notice the assumptions about the effect of changes in "money supply" based on money supply being settlement balances in the payments system ("bank reserves balances", abbreviated as "rb").The effect of such changes in conventional economics is based upon assuming that changes in the...

I was sent two papers by Thomas Palley the other day. I have known him for decades. He continually disappoints. He has become one of those self-styled Post Keynesians who are trying to destroy the credibility of Modern Monetary Theory (MMT) for reasons that are not entirely clear although I know things I won’t write here. He thinks that if he drops a reference to Michał Kalecki, the Polish Marxist economist, into a paper, it qualifies one as being Post Keynesian. But, the reality is that...

Ha ha. Noah Smith criticizes an MMT formal model expressed in words rather than equations (which he thinks is OK as a formal method and as a logician, I agree) based on, wait for it, unrealistic assumptions, which is exactly the same thing that heterodox economists accuse conventional economists of doing, that is, if one considered John Maynard Keynes himself to be a heterodox economist.MMT economists should not fall into the trap of trying to mimics the mainstream in creating formal...