Thread by @ezraklein

So I'm not enough of a macroeconomist to know if it's true that what MMT says that's new isn't true, and what it says that's true isn't new.

But I'll say that MMT has absolutely changed the things that MMT's critics will say are true.

https://twitter.com/LHSummers/status/1490424197180497921

I'll give an example: MMTers really like the Keynes quote "anything we can actually do, we can afford."

Their critics say: It's a Keynes quote! So it's something the Keynesians knew.

But in years of reporting with Keynesian economists, it is definitely not how they talked.

There was *far* more discussion in the 2010s of debt-to-GDP ratios and Reinhart/Rogoff than of the real productive limits of the economy, and where we were in relation to them.

So one debate about MMT is whether it should be understood as an economic framework or a theory of political economy.

I deal with it more in its latter incarnation, and at least in that guise, it's definitely forced the, let's say, rediscovery of certain truths.

Back at Vox, I hosted a discussion between @jasonfurman and @StephanieKelton that I think makes for very interesting listening now, on all sides. podcasts.apple.com/de/podcast/why…

What interests me about MMT right now is that they always warned inflation was the danger, real resources the constraint, but they did so when inflation was an abstraction.

Now that it's not an abstraction, I think they're having as much trouble as everyone else responding.

Politically, I think there are real criticisms to be made, particularly of how they often let their theory be framed as an argument for endless spending. So I half agree with Jason here.

https://twitter.com/jasonfurman/status/1490678388431851521

And generally, the people I trust most are pretty critical of their macroeconomic models, so I'm skeptical there, too.

But also: those same people will eventually admit to you that most macroeconomic models are pretty bad.

If you can really figure out macroeconomic modeling, I want to invest in your hedge fund.

But I'm annoyed at the gatekeeping response to my colleague @jeannasmialek's interesting piece, and the lack of self-reflection on why the MMT critique found traction, and what in it proved important.

So I think you should read the piece.
nytimes.com/2022/02/06/bus…

That said, in the interest of praising non-gatekeeping, I do like Larry Summers' prompt to consider more Marxist scholarship, and I can fill in a square on my Twitter bingo card I was not expecting!

https://twitter.com/LHSummers/status/1490424198162006018