Monday, February 27, 2012

Michael Hudson — MMT Theory as an ECB Alternative

Michael Hudson reports on the weekend MMT conference in Italy.

Read it at
MMT Theory as an ECB Alternative
By Michael Hudson
(h/t Clonal in the comments)

Crossposted at CounterPunch as
Our Very Own Oscar Night in Rimini
(h/t Kevin Fathi via email)


Clonal said...

Video of Stephanie Kelton in Rimini

Clonal said...

I should just add that the Italian translation makes Kelton's English inaudible

Matt Franko said...

I dont think Hudson has ever used the term 'MMT' before... ?

I could be wrong.


Clonal said...

Next best thing to filling the Coliseum at Rome?

Ryan Harris said...

Thousands of people getting together to learn about MMT. Magical thinking about that.

Clonal said...
This comment has been removed by the author.
Clonal said...

Also Kimball Corson --- What Is Modern Monetary Theory All About

It is a variety of Keynesianism -- nominally centered at the University of Missouri, K.C., with its most notable exponent, James Galbraith, a Cambridge trained economist and son of John Kenneth Galbraith -- that focuses more on the money supply, the importance of large deficits and their impact, the extent of use of productive resources and less on interest rates, the dangers of high public debt and the threat of inflation during recessionary times. It challenges the view that during recessionary times -- when resources are not fully employed -- deficit spending should be restrained out of fear of inflation or rising public debt. The argument is that deficit spending should be even more aggressive during depressed times because as long as there is unemployment and plants are not at capacity, inflation is not a realistic prospect. Neither is concern about a high debt to GDP ratio as long as we commit to not default and retain flexible exchange rates.
An implication, that constant deficits are usually preferable where there remain idle resources bothers orthodox Keynesians even more. Conservatives orbit. The implications of ever growing public debt seem not well addressed by either group, beyond the growing interest burden, and a great sense of unease by the orthodox Keynesians. Perhaps the failure to understand MMT, is what creates that unease. After all, what magic attends any particular Debt/GDP ratio, as long as a nation commits not to default, in whole or part, and maintains flexible exchange rates to permit it to make that commitment.