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The models of New Keynesians r irrelevant 2 the economy we actually inhabit. They suffer from a Lump of Savings assumpt. Banks do not need 2 gather deposits 2 make loans - loans create deposits. BoE has vids but you will not find this in Krugman textbook.
#MMTNotMMM What we really have here is MMT calling out MMM: Mickey Mouse Macro. Some investment professionals & central bankers know this, because we have to deal with actual money and finance institutions, make decisions with real repercussions for clients. MMM is malpractice.
But MMM does provide lovely cover for, and rationalization of, the interests of private creditors, who lose out when inflation persists or accelerates more than they expected and were able to price into to their loan agreements and bond purchases.
