MMT has two arguments against the golden rule, which I will call reasonable and unreasonable. The unreasonable argument is that interest rate increases do not reduce aggregate demand and inflation, and therefore fiscal policy has to play the macro stabilisation role at all times. It is an unreasonable claim because it contradicts the large amount of evidence that higher interest rates do reduce aggregate demand and inflation, evidence that you will find in the academic economic literature.
Those who watch Mike Norman's YouTube channel, which is MMT-based financial analysis, will find evidence presented that contradicts this.
Mainly Macro
Challenges to the strong golden rule: MMT and bond market paranoia
Simon Wren-Lewis | Emeritus Professor of Economics, Oxford University
Challenges to the strong golden rule: MMT and bond market paranoia
Simon Wren-Lewis | Emeritus Professor of Economics, Oxford University
11 comments:
Does Simon Wren-Lewis play the markets?
What about “QT”?
These Art degree morons are all conveniently ignoring all the “QT”….
So SWL gets the physical spending process backwards, constructs a straw man of MMT and then rattles on about the bond market as though that is relevant.
Yet never answers the actual question raised by MMT: why is it better to stabilise an economy by giving rich people free money than poor people jobs?
And even then it’s all being saved Neil as the deficit is increasing..,,
Probably being saved in tax deferred ERISA accounts and tax exempt offshore accounts as tax receipts are reducing..,
Although imo the MMT cohort is over estimating the bullish effect of the higher interest payments currently…
Largely The entities with the previous USD savings now receiving the higher rates of interest are saving even more,,, deficit is increasing.., it’s not bullish and hasn’t been since the July 19th high..,
“evidence that you will find in the academic economic literature."
Sounds like Darwinists when talking about creation…
"Sounds like Darwinists when talking about creatio"
Nah. That's hard facts tested over the decades against reality.
Economic acadamic literature sounds exactly like the sort of loony stuff creationists believe. It is, after all, just a bible full of gospels according to some dead guys and promoted by a bunch of priests from their University Monasteries.
A classic religion.
Blair Fix ripped them a new one a while ago: https://economicsfromthetopdown.com/2023/02/04/do-high-interest-rates-reduce-inflation-a-test-of-monetary-faith/
“ Economic academic literature sounds exactly like the sort of loony stuff creationists believe.”
What are you talking about there is hardly any Science involved in economics… it’s 99.9% Platonist…
Creation is in contrast a Scientific process…
You want to create a house ? What do you do just sit there in the forest waiting for a tree to random chance fall over and spontaneously divide itself into 2x4 dimensional lumber?
I don’t think so…
Dumb fuck Art degree Fed people have 10% RRR and adjust Depository reserve asset balances to 9.9%….
Same Art degree econo morons explaining it: “liquidity just dried up! by random chance mutation just like Darwin!” …
Meanwhile they fucking DID IT…
"Creation is in contrast a Scientific process…
You want to create a house ? What do you do just sit there in the forest waiting for a tree to random chance fall over and spontaneously divide itself into 2x4 dimensional lumber?
I don’t think so…"
That's the sort of swiss cheese cross linked thinking only an Art Degree Moron could come up with.
If a tree falls in the forest and no one is there to see it, it doesn't transform into lumber.
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