Tag Archives: MMT

Thornton Parker       In the first part of this series, we explained why MMT should be seen as a political problem rather than just an educational one.  In this concluding part, we will discuss where MMT promotion is most likely to fail or have good chances of success.  First, consider some poor prospects.          All readers of NEP know how Social Security works and it seems like a natural for MMT.  But is it?  Wall Street sees the program as a leak from what should be their profitable...

Thornton Parker       In the first part of this series, we explained why MMT should be seen as a political problem rather than just an educational one.  In this concluding part, we will discuss where MMT promotion is most likely to fail or have good chances of success.  First, consider some poor prospects.          All readers of NEP know how Social Security works and it seems like a natural for MMT.  But is it?  Wall Street sees the program as a leak from what should be their profitable...

Thornton Parker       In the first part of this series, we explained why MMT should be seen as a political problem rather than just an educational one.  In this concluding part, we will discuss where MMT promotion is most likely to fail or have good chances of success.  First, consider some poor prospects.          All readers of NEP know how Social Security works and it seems like a natural for MMT.  But is it?  Wall Street sees the program as a leak from what should be their profitable...

I've run across yet more lazy critiques of Modern Monetary Theory (MMT), arguing that "MMT says governments should just print money to stop the virus!", or similar nonsense. I may only be speaking for myself, my reading of MMT would lead to cautiousness with respect to the limits of fiscal policy at present. Given that we face considerable constraints on output capacity, we can see theoretical inflationary risks if fiscal policy was too active. (My base case view is in line with the...

Yesterday in my blog post – The coronavirus crisis – a particular type of shock – Part 1 (March 10, 2020) – I discussed some of the considerations that governments need to take into account when dealing with the economic damage that will result from the coronavirus crisis. I did not consider the health issues because I am unqualified to assess those other than to take into consideration what the health professionals are now saying as they gain more knowledge of the particular disease. In...

"Loanable funds." "Hyperinflation." "No such thing as a free lunch." You get the idea.The SAIS ObserverModern Monetary Theory – What do SAIS faculty make of it? Lief Olson

Today’s blog post is shorter than usual but you do get to access a hour-long video where I talk with Indigenous leader and activist Noel Pearson about Modern Monetary Theory (MMT), how it impacts on his perceptions of options to improve indigenous well-being in Australia, and how it informs a new collaborative venture we are in the process of putting together – JUST2030 – as a response to the socio-ecological crisis that three decades of neoliberalism and the fiscal obsession with surpluses...

Strategy.New Economic PerspectivesMMT is a Political Problem: Part 1 Thorton Parker

Economists like to think in terms of demand and supply. Often by assuming the independence of the two, they make huge errors, none the least being when in the 1930s they advocated wage cuts to cure the unemployment arising from the Great Depression, on the assumption that the cuts would reduce costs for firms and encourage them to hire more. But they failed to understand that economy-wide wage cuts would undermine aggregate spending, upon which production decisions, and, ultimately,...

By Thornton Parker        The way a problem is seen can determine how or even if it gets solved.  When the French engineer, Ferdinand de Lesseps, was picked to build the Panama Canal, he saw it as another excavation problem as his Suez Canal had been.  But Egypt was flat and Panama had a mountain.  When the United States took over the job, John Stevens, who was put in charge, saw it as a railroad problem.  The biggest task was to move ninety-six million cubic yards of rock and earth, as...