Tag Archives: MMT

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...

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...

Might not be MMT, but it isn't Socialism So there has been a lot written on Modern Money Theory lately. There is this piece by The Economist, Jerry Epstein's paper, and Lance Taylor's one, more on the Democratic Socialist ideas than MMT per se (here). There was also this op-ed by Robert Shiller in the NYTimes, and the two posts by Tom Palley, that I reposted here on the blog. Finally, Christine Lagarde also commented on MMT during the World Bank/IMF Spring Meetings.I can and I will not...

MMT for People in a Hurry By J.D. ALT POST #2  (See POST #1 here) FIRST: Prime the fuel-pumps As it stands, our diagram-machine has no fuel (“money”) in it, so it can’t operate. We could go through an exercise to imagine how it could prime itself in order to begin operations. But this would lead to other topics and considerations which would only distract us from our present goal—which is to simply understand HOW the diagram-machine operates—and how, and when, in the course of its...

This is the second and final part of my series on Scotland as I prepare for a visit to Edinburgh and Glasgow this week. You can see the details from my – Events Page – and I urge interested readers to support the events that are run by activists. I will be talking about issues pertaining to the monetary arrangements that might accompany a move to Scottish independence. I have noted in the past that this is a controversial issue in itself that is also made more divisive because it has become...

On the Indian economy, with a reference to MMT thrown in. If Ramanan sees this, perhaps he will comment.Financial Express (India)Ability to grow amid global declining trend a hallmark of IndiaSushim Banerjee

What I hope to achieve is to set out a framework based on Modern Monetary Theory (MMT) principles to allow the protagonists to make their own decisions, free of the neoliberal sort of monetary myths that I think have dominated the independence debate to date. I am always cautious discussing the pro and con of situations where I have no direct material stake and a less than full understanding of specific cultural and historical influences that are at work. But the Scottish question is...

MMT for People in a Hurry By J.D. ALT I’m expanding an earlier essay into a short, book-length piece I hope will be useful in the unfolding public debate about MMT. The piece will utilize the “operation” of a “diagram-machine” to illustrate how our modern money system actually works. My hope is that it will be accessible and easily understood by people who have a genuine interest in MMT, but little time or patience to delve into its operations and implications. I’m posting the narrative...

I can hardly believe that I am typing this. A resolution has been forwarded in the Senate to condemn an economic theory: “Recognizing the duty of the Senate to condemn Modern Monetary Theory and recognizing that the implementation of Modern Monetary Theory would lead to higher deficits and higher inflation.” I guess on the one hand that we should be happy that anyone is even aware of Post Keynesian economic theory. Scholars in this area have toiled largely in vain for going on a century...