Modern monetary theory—pandemic edition

Modern Monetary Theorists are having a moment, as governments (many of them run by conservative regimes, such as Donald Trump and the Republicans in the United States) are running gigantic fiscal deficits in order to combat the economic crisis occasioned by the coronavirus pandemic.* This time, with the $2 trillion CARES Act, the U.S. federal […]

Storm in a teacup

I have to laugh when I read the back and forth about who sneered at whom in the battle over mainstream macroeconomics. According to Paul Romer, Chicago’s rejection of MIT-style macroeconomics was a defensive reaction to the sarcasm of Robert Solow. Paul Krugman says no; Dornbusch, Fischer, and others at MIT tried to meet Chicago halfway but […]

MMT goes to Washington

Apparently, the deficit owls of Modern Monetary Theory have found a perch in Washington, D.C.—in the form of Stephanie Kelton, who late in 2014 became the chief economist for the minority of the Senate budget committee. I discovered Kelton’s appointment when trying to figure out who Bernie Sanders’s economic advisers are. Well, I failed. Here’s a […]

Money—part one

  This is the first part of a two-part series on money, directed by James Schamus (best known as the producer of such films as Hulk and Brokeback Mountain). The films about money are part of We the Economy, 20 Short Films You Can’t Afford to Miss (from writer and director Morgan Spurlock and Microsoft cofounder Paul G. Allen). […]

Tax this!

I’ve written more than a bit over the years about taxes, distribution (including predistribution), and Modern Monetary Theory. But I’ve mostly treated them as separate issues (except here). Randall Wray [ht: br] has brought those issues together, building on Rick Wolff’s argument against raising taxes as the solution to inequality. Rick is absolutely correct that […]

Employer of Last Resort?

I don’t have a dog in this hunt. But I do have a suggestion. The hunt I’m referring to is the current spat between Thomas Palley and Randall Wray over Modern Monetary Theory, especially the idea of the government as Employer of Last Resort for unemployed workers. Fine, battle it out, you two.* What I […]

The owl of MMT

In the midst of the current deficit-cutting frenzy, the “deficit owls” of Modern Monetary Theory are finally getting some attention within mainstream media. The latest is the article by Dylan Matthews in the Washington Post. It’s a good first primer on the historical roots (in Keynes) and basic ideas (including the links among money, the […]

Money makes the world go ’round

Another sign of the failure of mainstream economics (one among an ever-increasing number) is the proliferation of new schools of monetary theory in the economics blogosphere. A recent article in the Economist highlights three such theories: Neo-Chartalism (or Modern Monetary Theory), Market Monetarism (sometimes referred to as Quasi Monetarism), and Austrian economics. What’s interesting is […]

MMT Bill Mitchell goes Marxist?*

source Bill Mitchell, one of the leading theorists of and advocates for Modern Monetary Theory, argues that “we need to read Karl Marx.” We cannot really understand the crisis unless we understand the underlying class dynamics. Sure enough I usually say that the crisis is the result of poor government policy and a failure to […]

Trickle-down debt

Much of the debate surrounding the U.S. federal debt has been impending doom, at some point in the future, without an adequate understanding of when and how that debt was accumulated in the past. Steve Benen suggests a stroll down memory lane in order to provide some perspective. What his timeline suggests is a relationship […]