The Rogue Economist also riffs on the Krugman controversy in When does a country loss access to the bond markets? Also a post on the value of MMT. He concludes:
"Krugman wrote the post to illustrate his differences with the MMT crowd. Which is again unfortunate, because I’ve found that MMT descriptions of how the macroeconomy works is the most technically correct , provides a seriously objective framework to understand what actions cause which vs. what, and is the only economic framework that incorporates how credit and investment actually functions and affects the overall economy.
"To put it in analogy, MMT looks at a fire and notices that firemen are the most effective method to combat the fire. By comparison, the classical explanators are those who notice that whenever there is a fire, there always seems to be a lot of firemen. So hence, the best way to decrease the number of fires is to decrease the number of firemen.
"Previously, if you were in any finance type of work, you could safely ignore macroeconomic prognoses on your industry based on the classical view, and your ignorance of the prognoses would not affect you in any way. Now you ignore macro analyses based on the MMT framework at your peril." (hat tip to Stephan Ewald)
Thanks for the kudos. All MMT'ers take a bow.
The Rogue Economist first broached MMT with some questions about "Chartalism" in February, 2010, here and here.
UPDATE: Robert Vienneau of Thoughts On Economics posts on Krugman v. MMT here.