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Sunday, July 28, 2019

Mark Blyth - So can we have it all?

Mark Blyth severely criticises MMT at around the 24 minute mark. It lasts about 5 minutes. He says it could work for America but would mess up the rest of the world which needs dollars to buy oil. What do you think?



7 comments:

  1. Mark's an interesting case. He understands all the separate parts of MMT but never quite puts them together into a whole. His cute quip about Venezuela gives his hand away.

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    1. I asked Warren Mosler once and he said it would work in the UK.

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  2. He forgets about the part of MMT that says that you float your currency, In other words, the value of your own currency may drop or rise, depending upon how much you need to import this allows you to export for the imports you need need.

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  3. Frances Coppola put much the same argument as Blyth about six months ago. See:

    http://www.coppolacomment.com/2018/11/the-myth-of-monetary-sovereignty.html

    Kaivey rather exaggerates the severity of Blyth’s criticisms when he says Blyth “severely criticises MMT”. Blyth just says that MMT is easier for the US to do because the entire World needs US dollars. But the rest of the World does not have an INFINITE appetite for dollars. Once other countries have enough dollars to buy oil and satisfy their “dollar savings desires” why would they want more?

    Re Venezuela, the fact that MMT wouldn’t work there is not a weakness in MMT: nothing much works in Venezuela!!!


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  4. It's a very informed and interesting talk, not that one can take it all in at first hearing. On MMT, I can see why the US dollar has so much sway. It's because most markets, for oil etc run on dollars.. Fine, but he makes an error regarding MMT and money creation.
    Bonds don't create money. As he later says bonds are investor savings and the government does not spend them. MMT explains that creation of the currency is deficit spending. [It's another reason why taxes cannot create revenue;[ the budget cannot have spending on both sides of the equation] Deficit spending buys the government debts which makes the currency liability free.

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