JKH commented on a recent post of Pavlina Tcherneva at New Economic Perpsectives. Lots of good comments there from John Carney, Pavlina, JKH, and may regulars here, too.
(h/t Senexx via Twitter)
Pavlina,
Further to our previous discussion, let me present a shocking recommendation for how to market MMT:
Define Modern Monetarism as that school of economics and economists whose primary public policy objective is full employment and price stability, using MMT as the analytical engine behind policy development.
Redefine MMT as the descriptive, analytical component of MMT as we identity it now.
That positions Modern Monetarism as a very strongly policy oriented economics movement, and MMT as the unique analytical approach it uses.
So the primary marketing presence of Modern Monetarism and Modern Monetarists would be their goal of achieving a set of specific public policy objectives that include JG at the top of the list (I presume).
Within that policy set, you could work out what I’ve referred to as the optionality range covering that policy set (e.g. zero rates), but making it clear that achieving JG is the leading policy thrust of modern monetarism (or not, depending on how you choose to define your policy set objective).
In thinking about this, I’ve reflected on the comparison of the MMT situation with the relatively new “Market Monetarists”. The irony here is that the Market Monetarists have a stronger marketing strategy than MMT, at least in my view, but a much weaker analytical engine behind it, again in my view. The reason I say that is that their policy objective is rather clear and “out there” – NGDP targeting. My impression that their analytical engine is much weaker, while personal, is probably something that MMTers would be quite sympathetic to. It has to do with the nature of the monetary policy actions they envisage as accomplishing their objective, should such an objective ever be adopted as policy. Enough said about that. But the curious thing about their situation is that the policy thrust of NGDP targeting gets the buzz from a marketing perspective, and the underlying analytical engine doesn’t get all that much attention, relatively speaking. The effectiveness of that engine is just assumed away. It’s like drive for show, putt for dough in golf – the drive there is NGDP targeting, but personally I don’t think they’ll ever get the ball in the hole. This is something Modern Monetarism may want to think about – driving for show with even more emphasis on the policy side than exists now. As far as getting the ball in the hole goes, I’m probably more convinced at the outset that the Market Monetarists, once on the green, would end up putting the ball right off the green and into the bunker. I’m not sure about the comparable case of the Modern Monetarists, except that I think they’re definitely much better at reading greens, which is a good start.
(Bonus corollary to the recommendation – Cullen Roche gets to advertize unambiguously that he still loves MMT)source
9 comments:
JKH Quote:
Define Modern Monetarism as that school of economics and economists whose primary public policy objective is full employment and price stability
Federal Reserve's dual mandate
Quote:
The Congress established two key objectives for monetary policy--maximum employment and stable prices--in the Federal Reserve Act.
On the question of marketing MMT, note that marketing operations usually employ a variety of messages for a variety of target audiences of potential customers.
I can appreciate that when people like Cullen are trying to market MMT to people in the financial world, and to people like John Carney, associations with left-wing messages can kill the sale.
But I am personally trying to aim at the community of younger progressives, many of whom will comprise the next generation of leaders, and get them to pay attention to MMT. And believe it or not, among that group of potential customers, it is not much help if they perceive MMT as a school of thought associated with Wall Street traders and hedge fund managers.
Some people might not have gotten the message yet, but there is a sizable proportion of the population - and not just a few young OWS types - among whom Wall Street, the financial sector and the people who work in it are not particularly popular.
So the marketing challenge cuts both ways.
Dan,
You are very right on that. Particularly if the MMT message is taken to be that the Federal Government can print money without limit, and spend that money on the wealthy elite, resulting in large societal inequities.
MMT is equated to the current system of financial fraud and crony capitalism. This why the MMT message often does not play well to that audience. To them tax the rich, help the poor, get out of foreign wars and balance the budget makes much more sense.
Dan Kervick,
“On the question of marketing MMT, note that marketing operations usually employ a variety of messages for a variety of target audiences of potential customers.”
Following is an additional comment I left at NEP. I think it starts to address your concern. The key is to be open, not closed. And the marketing of what is now called MMT would be the marketing of two somewhat distinct ideas, cast as Modern Monetarism and MMT respectively, corresponding to the preferred policy of Modern Monetarists and the politically neutral interpretation of modern monetary operations, respectively. Those who love MMT may still have different ideas about policy than the modern monetarists themselves, based on their own use of the knowledge revealed to them through MMT. That’s flexibility in appealing to different target audiences, where the target is absolutely open source as far as MMT is concerned:
............
http://neweconomicperspectives.blogspot.com/2012/01/whats-mmt-about-anyway-and-is-job.html#comment-407636454
" "Given the definitions above, it seems that all modern monetarists must be MMTers, but not vice versa. You could be sympathetic to MMT analytics _without_ caring about any particular policy goals."
Roughly, yes. That was part of the motivation. The Modern Monetarists as defined are the creators and primary users of MMT, but MMT as an analytical approach to understanding monetary operations is open to others as well. This has the advantage of spreading the benefits far and wide of proper understanding of monetary operations through MMT (“positive”), while not necessarily controlling the uniform acceptance of a particular policy use of MMT (“normative”). That in turn has the further advantage of facilitating/encouraging debate about policy in a broader sense, against the backdrop of a neutral analytical approach.
The other part of the motivation is that the current MMT leadership group could reinforce the nature of their own mission as strongly policy oriented, with MMT as the analytical engine that gets them there. As one element of this, the importance and necessity of the JG needs to be clarified for policy clarity and marketing purposes. And the climate of open debate referenced above includes an originating group that has developed its own clear policy position, and markets this position as its chosen way of using MMT.
Market Monetarism implies MMT, but not necessarily vice versa in this interpretation.
The optics may seem a bit awkward, but I think it actually reflects what's been happening in these recent JG debates. "
We need a central hub of "JKH economic thought" - let me know if you want me to set up a simple WordPress.com blog for you :-) Everything is "free" (except there may be text-ads?).. example: hugoheden.wordpress.com
Hugo,
Thanks very much - for the thought and the offer.
I'll certainly keep that in mind.
JKH
Would be good to have pages at the MMT Wiki to capture important things like this. e.g., a JKH page, with references to sources of comments.
you guys need to sell it to joe six pack, the people that vote. make people understand in simple terms how the macroeconomy works. once they learn that money is a creature of the state, that, yes, it is ours, since we are the citizens that make up this country. also that we are not broke, we dont borrow money from china. if you could condense the 7 deadly innocent frauds down to a page, i would gladly post it everywhere i went. its funny(not really)how the gop fought tooth and nail for shrubs tax cuts, but a tax cut for joe shmoe living pay check to paycheck is too much to ask. even though they would use that as an excuse to cut the safety net. (cant afford it) politicians are scum
JKH you have great ideas here. It's somewhat frustrating to see how resistant Pavlina is here. She needs to take off her academic hat and put on her businessperson hat.
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