William K. Black — AOC# and MMT Spook the AEI

Strain and Veuger never try to meet the burden they set for themselves with their frenzied rhetoric. The key test of a theory’s validity is its predictive ability. A theory that is so weak that it is a “joke” made by “luna[tics]” should collapse as soon as its predictive ability is tested. What predictive failures do Strain and Veuger demonstrate MMT scholars have made? None. What predictive failures do they attempt to show MMT scholars have made? None. That failure even to attempt to show MMT scholars’ predictive errors is extraordinarily telling. First, you know they would have attacked even a minor predictive error by MMT scholars – if they could find such an example. Second, that means they could not find even a minor predictive failure by MMT scholars. Third, the AEI’s failure to find any predictive failure by MMT scholars is fatal to their assertion that the MMT – the basis for MMT scholars’ macroeconomics predictions – is such a “joke” that it invariably produces “lunacy.”...

New Economic Perspectives
AOC# and MMT Spook the AEI
William K. Black | Associate Professor of Economics and Law, UMKC