Modern Monetary Theory - Copernican revolution or nonsense
The squabbling over whether Modern Monetary Theory is a Copernican revolution for public policy or a load of nonsense hasn’t been very enlightening. The prevailing sentiment in both camps — “You just don’t get it” — is a declaration of faith that hardly inspires confidence in economics as a science.
Many years ago, at the height of policy makers’ interest in “monetarism,” I worked in the U.K. Treasury, helping produce short-term forecasts of the money supply.
The issuer of a currency - ett land med en egen valuta - can issue as much as it likes. The only constraint, says MMT, is the capacity of the economy to meet demand. If the government spends too much, the excess of demand will cause inflation.
This is up to this point, not really at odds with orthodox macroeconomics.
Congress that generally struggles to do anything, never mind execute a demanding new fiscal policy with foresight and technocratic exactitude.
But, as I say, their ideas are really interesting.
Clive Crook Bloomberg 10 February 2022
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