Scott Fullwiler's article "The debt ratio and sustainable macroeconomic policy"* offers a very good introduction to Modern Monetary Theory's (MMT) stance on fiscal policy. It covers a lot of ground, making it hard to summarise. This article has some general remarks on why I recommend reading the paper as an introduction to MMT thinking. The key argument is that interest service is what matters for sustainability (and not the debt-to-GDP ratio) -- and that the rate of interest is under the control of governments.Apparently Stephanie Kelton thinks that this is a good intro to MMT thinking, too. When Larry Summers requested somethings to read to get up to speed on MMT, she recommended Scott's paper.
Bond Economics
Brian Romanchuk
Only trouble with Scott's paper is that it is about 30,000 words. So I've just spent the last hour typing out my own (cheeky) 600 word introduction to MMT:
ReplyDeletehttps://ralphanomics.blogspot.com/2020/03/mmt-in-six-hundred-words.html