UMKC Prof. Randy Wray just posted an overview of his earlier (2002) prediction about what developed into the GFC based on the sectoral balance approach and US data. In it, Randy gives the math — sectoral balances summing to zero — and the empirics — the data for the periods — to show how the MMT view bears out.
Randy also points out that the WSJ got it completely backwards at the time, and the mainstream still hasn't figured it out. Now, mainstream economists in the US, UK, and EZ are calling for "expansionary fiscal austerity" based on the same failed ideas, while MMT shows why this will lead to contraction instead.
2 comments:
Were 'austrians' the ones asking for empirical and mathematical proof? The world upside down...
MMT is the Rodney Dangerfield of Economics. But the brilliant professor breaks it down to Econ 101 and draws the counter intuitive conclusion. Nice.
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