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
Usual moron hate showing up there in the comments.... rsp
ReplyDeleteI was just over at ZH commenting for fun, and it's amazing. Most of them are clueless about operations. For their sakes, I hope that they are purely technical traders and are not at all influenced by their views of how things actually work.
ReplyDelete