Tag Archives: MMT

Video and transcriptTRNNTrump Up in Polls; Who Benefits From Economic Growth?Paul Jay interviews Dean Baker and Randy Wray

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

Is it plausible that programs costing 34 percent of current US GDP can be financed without running up against those pesky real resource constraints, or by exceeding it only by a tolerable margin? I very much doubt it, which is another way of saying that I doubt that GND can be paid for only by diverting substantial amounts of presently-employed real resources from their current uses. Now we are getting down the nitty gritty — the real resources constraint. I have emphasized previusly that...

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...

Richard Murphy continues to misrepresent MMT. His depiction of the essentials of MMT covers only some of the institutional aspect and description of operations. He leaves out the macro theory that sets the foundation for applying MMT, e.g, as a policy science in policy formulation. As a result he views the MMT job guarantee as merely political rather than integral to the whole system that MMT explains in a general way. Certainly, people (voters) need to know the essentials of MMT that...

Should you be worried about the federal deficit? While campaigning, President Donald Trump followed in the footsteps of his conservative predecessors by fear-mongering about the ballooning deficit — but when he got to the White House that concern all but seemed to disappear when it came to his tax cuts for the rich and increased government spending. In fact, there’s a pattern to the Republicans’ selective concern about increasing the deficit, and it all depends on who holds the power. When...

MMT economists have been saying that the government acting through its central bank has this power as currency monopolist to manage the yield curve in addition to setting the policy rate, if it chooses to use it.  What difference does this make? The 5 and 10 year rates serve as benchmarks for commercial lending. Since housing is such an integral part of the economy, mortgage rates are especially influential and it has been argued that central bank interest setting acts primarily through...

Economies are human constructs, not inevitable natural phenomena. Humans make up the rules that participants must follow when playing the game, and as the economy grows and evolves, humans must change the rules of play in ways that optimize the well-being of the majority of participants. In this piece, we argue that the MMT fiscal policy proposition of government spending into the private sector, with inflation being the only limiting factor, is not only needed for a real recovery from the...