A reply to Stephanie Kelton
The crux of the MMT debate
This recent article by Stephanie Kelton is crystal clear and reveals the crux of the ‘MMT debate’. It’s all about central bank independence.
Also listen to this INET interview wi...
Stock prices & r*
Economists pay insufficient attention to asset prices. Ask most economists what the relevance of the bond equity correlation is for fiscal policy and they will be baffled. You’ll be lucky if they know what you’...
Functional finance and fiscal rules – a synthesis (Part II)
Introduction
A curious argument has broken out over the Labour’s proposed fiscal rule. Some advocates of functional finance, in particular, have been vociferous in their criticisms. There is scope for a consid...
MMT and fiscal rules (part I) – a prologue
When I explained the essential tenets of Modern Monetary Theory (MMT) to Ben Bernanke, over dinner in Washington, he replied somewhat quizzically, “Isn’t that just economics?” In fact, on the accounting treatme...
Why is universalism losing?
There is a tension in all enlightened ‘identity politics’. How do we combat discrimination without accepting the premise that there is significant difference? And how do we promote universalism without denying ...
An intellectual virus, a bubble, or both?
The recent phase of market volatility precipitated by the February 2018 ‘flash crash’ has morphed into fears of a growth slowdown, phoney Trumpian trade wars, and real wars. But the initial crash itself may be ...
If you don’t like trade deficits – tax the rich?
Has the word ‘deficit’ done more damage than any other in economics? Deficits are bad, surpluses are good. In economics, nothing could be further from the truth. How can there be virtue, if every virtuous act r...
Values in economics
A philosophical aside
I feel obliged to declare my biases up front. I've spent almost as much time studying moral philosophy as economic theory. Somewhat ironically, I decided to study economics after I had re...
MMT part III – conclusion, and a conversation with Ben Bernanke
My last two blogs have revisited the issue of whether or not base money is a liability of the state. The issue played a central role in a discussion over the future of monetary policy at the Brussels think-tank...
MMT part II: a synthesis, an olive branch, and a defence of Twitter
This is a short follow-up to my previous post, ‘MMT - sophistry or substance?’, and Simon Wren-Lewis’s ‘Why is MMT so popular?'.
Summarising, I suggest the two defining characteristics of MMT are: (1) a theo...