Tag Archives: MMT

More about Blanchard than MMT but worth a read since it provides more evidence that MMT is getting noticed — and attacked by the mainstream (read Establishment). Both are positive signs. When they can no longer ignore you, they attack you.. Naked KeynesianismFunctional Finance, MMT and Blanchard's Presidential Address Matias Vernengo | Associate Professor of Economics, Bucknell UniversitySee also Below the text of the first Godley-Tobin Lecture by James K. Galbraith. A global...

In most ways, Modern Monetary Theory—Functional Finance—is just macroeconomic common sense: We do not like high unemployment. We do not like excessive inflation. Thus the government should make it its first priority to use its tools of economic management so that we do not experience either. And maybe the government needs to be a little bit clever in how it uses fiscal and when and how it uses monetary policy to keep the task of financing the national debt from becoming an undue or even...

So Olivier Blanchard gave the AEA presidential address at the Atlanta meetings earlier this year. If you missed it you can watch it here. The paper is also here. In all fairness, there is nothing new there. He notes the famous rule by Evsey Domar about sustainability of public debt, meaning that if the rate of interest on debt is lower than the rate of growth, debt-to-GDP ratios tend to be stable and you are in no danger in pursuing active fiscal policies.Note that functional finance is in...

Thomas Fazi and I have been discussing the shape of our next book and I think it will be an interesting and worthwhile followup to Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017). We hope it will be published some time late in 2019. One of the angles that will be delved into is the way in which neoliberal narratives and constructs have permeated individual consciousness. Yes, sounds a bit psychological doesn’t it. But there is a...

By J.D. ALT I recently read in the WSJ that Modern Monetary Theory is defined as the proposition that the federal government can borrow as much money as it needs so long as the interest rate it pays is less than the growth rate of the GDP. The short article, by Desmond Lachman, went on to argue why this was a dangerously false premise. Thus, MMT got shot with two bullets in one paragraph: first by defining it in a way that negates its most fundamental principle (that the federal...

Modern Monetary Theory (MMT) has been in the news again (and filled up my Twitter feed...). There have been a number of attempts to "explain" MMT by various American conservatives. As one might expect, those attempts have been pathetic; it is generally a good idea to have at least a reasonable grasp of a topic before attempting to explain it. Critics of MMT generally do not bother with that step. Since I am trying to work on other projects, I will only give a quick response to what I have...

Robert Vienneau links to the "popular" trolls, followed by a short summary of MMT as essentially correct as descriptive of the monetary system.Thoughts On EconomicsElsewhere: Popular Writing On Modern Monetary TheoryRobert Vienneau

"Be afraid, very afraid."This might be the nuttiest yet.Zero HedgeModern Monetary Theory (Or, How I Learned To Stop Worrying & Love The National Debt)Ben Hunt via EpsilonTheory.com,

The simple fact is that imports are real benefits, meaning real goods, for the importer and exports are real costs for the exporter, who exchanges real goods for financial goods ("money").That is to say, one party to the exchange obtains real resources in exchange for monetary payment. This implies that the party accepting the payment desires to save, however, temporarily in the currency in which the real goods are priced.Nothing else is claimed in saying that imports are real benefits and...

The trolls are at it.Continental TelegraphZimbabwe’s Real Riots Problem – Modern Monetary Theory Strikes Again Tim Worstall AEIEp. 124: What is Modern Monetary Theory? — Political Economy with James Pethokoukis The WeekWhy Modern Monetary Theory is an unserious idea for an unserious time James Pethokoukis