Philip Pilkington — An Alternative Economic Approach for Developing Economies

One of the main concerns with implementing economic policy in developing countries is inflation. Many of these countries do not have sufficient productive capacity to ensure that their population is able to consume the goods and services they desire when their living standards rise. This often leads to rising imports, currency devaluation and inflation when policy is geared toward rising incomes.

These are some of the problems that Randy Wray dealt with in his recent post on a jobs guarantee program as it might be implemented in developing countries. Wray says that in order to overcome inflation from higher incomes, the program should be implemented very gradually. While this seems like a sensible approach I think that Wray is being slightly too modest about what sort of policies Modern Monetary Theory (MMT) can facilitate to ensure both full employment and price stability.

Read it at Naked Capitalism
Philip Pilkington: MMT, Functional Finance and Dirigisme – Sketch of an Alternative Economic Approach for Developing Economies
by Philip Pilkington