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For anyone who thinks there’s no difference between MMT and conventional Keynesian theory.
Keynesian: Finite pool of money, loanable funds theory of interest, crowding out, etc.
MMT: Deficits are self-financing, deficits push rates DOWN, deficits RAISE private savings
Keynesian: Finite pool of money, loanable funds theory of interest, crowding out, etc.
MMT: Deficits are self-financing, deficits push rates DOWN, deficits RAISE private savings
None of this is “conditional” on being in a “depressed economy.” It’s just where you end up when you get the monetary operations right.
The *core* strength of MMT is without a doubt its superior understanding of monetary operations. And that is a debt we all owe to @wbmosler for his careful tutelage in the early years.
Poor Keynes. He devoted much of The General Theory to crushing the loanable funds theory of interest only to have it become a bedrock of modern Keynesianism. Further irony is how it has been used to undermine the case for fiscal policy.
Find loanable funds in *every* macro analysis produced by CBO, eg. Complete will all of the crowding out garbage.
Don't believe me? neweconomicperspectives.org/2014/07/cbo-st…
It's extremely damaging, given the importance placed on CBO feedback. Need a complete overhaul of the methodology. They should all do boot camp with @wbmosler to get the operations down.
It's extremely damaging, given the importance placed on CBO feedback. Need a complete overhaul of the methodology. They should all do boot camp with @wbmosler to get the operations down.
