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Stephanie Kelton responds -- and I feel a sense of despair 1/ bloomberg.com/opinion/articl…
Her response to my first question totally misses the point; I was asking if *given private behavior* there's a unique level of the deficit needed for full employment, and argued that there wasn't. She just assumes that there is 2/ 
She apparently thinks I believe that monetary policy can always get us to full employment, no matter the fiscal stance. I guess all those articles I wrote denouncing austerity policies only existed in my imagination 3/
She asserts that interest rates don't matter for demand by citing small effects on business investment -- a point I've also made. But monetary policy works through housing and the exchange rate, which every macroeconomist know 4/
And no, I wasn't assuming a fixed money supply. I was asking what the Fed can do, moving the interest rate by changing the monetary base. I can't imagine how this was misunderstood. 5/
Sorry, but this is just a mess. Kelton's response misrepresents standard macroeconomics, my own views, the effects of interest rates, and the process of money creation.
Otherwise I guess it's all fine.
See what I mean about Calvinball? 6/
Otherwise I guess it's all fine.
See what I mean about Calvinball? 6/
