Tag Archives: MMT

Thread by @stf18 at threadreaderapp.com1. Quick(?) MMT 101 lesson:From the very beginning in the 1990s, MMT has NEVER argued that 'printing money' was necessary. Anyone saying MMT = "print money," even if they (correctly) incorporate an inflation constraint, is getting MMT dead wrong.2. The argument from the earliest days--@wbmosler 's "Soft Currency Economics," Wray's "Understanding Modern Money," or @StephanieKelton 's "Can Taxes & Bonds Finance Govt Spending?"--the MMT argument is...

Mag[ie continues to fisk Paul Mason on Marxism and MMT. Magpie's Asymmetric WarfareGetting all Tied Up (4) Magpie

How to Pay for the Green New DealWORKING PAPER NO. 931 | May 2019  This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the “costs” of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as...

L. Randall Wray How to Pay for the Green New DealWORKING PAPER NO. 931 | May 2019 This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the “costs” of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and...

In this post, Stephanie Kelton takes on Paul Krugman. She appears to agree with Paul Krugman's assumption that monetary policy that is built on raising interest rates to address inflation is not backwards. Actually, central bank interest rate setting is a form of price setting, the policy rate being a variable that sets the cost of borrowing (price of money). Higher interest rates are also inflationary to the degree that increase the income of holders of securities, as Warren Mosler has...

If there were two lessons that can be taken from the GFC among others then we should know, once and for all, that, first, monetary policy (in all its glorious forms these days) is not a very effective tool for influencing the level of economic activity nor the price level, and, second, that fiscal policy is very effective in manipulating total spending and activity. Of course, those lessons provided the evidence that turned macroeconomics on its head because for several decades, as the...

I suspect Wolf chose to get this wrong, deliberately. His narrative does not work if he noted correctly what MMT said. But his real disagreement is that whilst MMT is correct (subject to his own misconceptions) he thinks the policy implications are wrong. Nice smackdown, if a smackdown can be considered nice.Richard Murphy concludes: Wolf has conceded MMT is right. Now he needs to accept the consequences. Including that democracy by and for the people should prevail. To this I would add...

In the next iteration of the financial crisis, there will be a more widely distributed response than the first, where only the wealth and well-connected were served. That produced a backlash that is still operative.CNBCThe next downturn could see a 'radicalization' of the policies used during the financial crisis Jeff Cox

Useful critique of MMT. Martin Wolf at least took the time to read Randy Wary's Modern Money Theory. His areas of agreement with MMT are mostly factual, whereas his criticisms appear to be mostly opinion. In addition, he is unaware of what some of the other MMT economists have written about his areas of concern. Most seriously, his solution is more technocracy, which ignores the agency problem. But worth a read. Financial TimesStates create useful money, but abuse it Martin Wolf

The post is interesting from the POV of history of economics. Antony P. Mueller points out how MMT owes more to Kalecki than to Keynes. His criticism of MMT goes astray in assuming the conventional economic view of debt-financed fiscal deficits crowding out private sector productive investment. MMT shows how this assumption is erroneous in that the net spending after taxes injects the exact amount of bond issuance in offset. It's the spending that funds Treasury security issuance.  In...