Sumner And Endogenous Interest Rates — Brian Romanchuk

Scott Sumner has continued his efforts to understand the MMT textbook by Mitchell, Wray, and Watts (which I will summarise as MWW), but he is running into problems. However, those problems just reflect Sumner's Monetarism, which is out of step with modern mainstream and post-Keynesian understanding of interest rates.

He is concerned about the wording of the textbook, but that textbook has some of the same problems of any discussion of interest rates that takes place in introductory economics textbooks. If we want to discuss interest rates properly, we need to understand the concept of rate expectations and the risk-free yield curve, on top of understanding how private sector interest rates are related to that curve. The mathematics of that understanding is beyond the target audience of an Economics 101 textbook....

Bond Economics
Sumner And Endogenous Interest Rates
Brian Romanchuk