Two weeks ago I cited Paul McCulley’s claim that MMT got it right. I followed that up last week with Brad DeLong’s claim that we’re all Minskians now. Well, most of us, anyway. Is MMT on a roll? Well, maybe not, if you listen to the critics.
In particular, an Italian economist, Sergio Cesaratto called the MMT victory “spurious”.
(http://nakedkeynesianism.blogspot.com/2012/07/spurious-victory-of-mmt.html) I’ll try to focus in on the main complaint, which seems to be that MMT missed the true cause of the Euro mess: current account deficits run up by some profligate EMU members.
Over at NEP, I have just offered up a number of early examples of MMT analyses that in my view “got it right”: http://neweconomicperspectives.org/2012/07/mmt-the-euro-and-the-greatest-prediction-of-the-last-20-years.html. I won’t repeat all of them here as I am going to focus directly on what I see to be the causes of the crisis and link that back to the argument that it is all due to current account imbalances.
Sorry, this is going to be a long and wonky piece, as befits a complex and still unfolding disaster. And it will come in two parts.Read it at Economonitor | Great Leap Forward
MMT AND THE EURO: Are Current Account Imbalances to Blame for the Euro Disaster? Part 1
by L. Randall Wray