Thread by @RayDalio

If you’re interested in economics, especially about how monetary and fiscal policy will work differently in the future... (1/2)

...read my thoughts on Monetary Policy 3 (the new type that we will see more of around the world) and Modern Monetary Theory (which has received a fair amount of attention recently) here. (2/2)
linkedin.com/pulse/its-time…

To be clear, I am not endorsing MMT! I’m asking you to take the label off the thing and ask yourself the following question:

What happens when the economy turns down (which it will eventually do) at a time when people are at each other’s throats over the wealth/opportunity gap (which they are now and will be even more in a downturn)...

... and interest rates can’t be lowered to stimulate the economy (so, in my lingo, monetary policy 1 stops working) and “printing” and buying financial assets, otherwise known as quantitative easing (which I call monetary policy 2), stops working (which we are close to)?

To answer that question and what should be done in such a situation, think about the cause:effect mechanics and study history to imagine what will happen.

I believe the logic and history lessons tell us that Monetary Policy 3 (monetary and fiscal policy coordination of a sort explained in my studies) will happen if the folks in power are capable of coordinating among themselves (a big ‘if’ in our case).

If not, worse things will happen. If you’re interested in what I have to say about the broader dynamics at play (i.e., Monetary Policy 3, of which MMT is one of a million possible versions) please read the article yourself which you can find here: linkedin.com/pulse/its-time…

And, if you want to see the historical cases go to economicprinciples.org.