There was a recent exchange on whether MMT prescribes a certain size deficit. As @KarlWiderquist argues here, the answer is no. But I would go even further. MMT does not prescribe or aim to estimate a specific size of 'desirable' govt deficit for several reasons....Read the thread here.
Wednesday, June 2, 2021
Pavlina Tcherneva on the size of the fiscal deficit
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4 comments:
http://www.levyinstitute.org/publications/surplus-mania
“ However, the surplus will be short-lived, it will depress economic growth”
Dis-saving does not suppress economic growth... he got bailed out by the Sept 11 attacks...
This is not worded well:
“ They are endogenously determined by changing incomes, profits, etc.
Deficit are countercyclical and must change with conditions.”
I would take out the word “must”...
Or “ They are endogenously determined by changing incomes, profits, etc.
Deficit are observed as countercyclical and increasing or decreasing depending on conditions.”
If you bring “must” in then you are bringing in will or implying a policy
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