Constructive criticism.
Kelton rightly says that monetary sovereignty is a continuum rather than a binary classification. Countries have different levels of monetary sovereignty. Where would India fit in? The Indian government mostly borrows in rupees. Yet, the country as a whole borrows from the rest of the world. One of the central claims of MMT is that governments do not face any financial constraints. They only face real constraints. However, countries such as India do face a financial constraint. It is called the balance of payments. India needs foreigners to buy domestic assets to get the dollars it needs to fund its current account deficit. It is a financing constraint, and one that is not unrelated to government budgetary policy....
Mint (India)
Modern Monetary Theory: Let's look at it from India's perspective
Niranjan Rajadhyaksha | member of the academic board of the Meghnad Desai Academy of Economics
Modern Monetary Theory: Let's look at it from India's perspective
Niranjan Rajadhyaksha | member of the academic board of the Meghnad Desai Academy of Economics
6 comments:
The labour market is informal. Employment is often seasonal. There is a persistent problem of disguised unemployment. Labour force participation is low, especially for women. The structural challenge is to create jobs outside agriculture. Niranjan Rajadhyaksha
Sounds to me like a country that is largely free of wage-slavery - where many are housing and food secure. And he wants to change that? Mr. Rajadhyaksha should look at the US where even in this very rich country very many are insecure in housing and food and being able to work productively.
India needs foreigners to buy domestic assets to get the dollars it needs to fund its current account deficit. Niranjan Rajadhyaksha
A losing proposition - productive assets for a "mess of pottage." The PTB selling out their own country?
“ to get the dollars it needs to fund its current account deficit.”
reification error...
Matt: I think that it is an error, but not reification.
author saying the nation "needs" the [insert abstraction here] "to" [insert activity here]
is a reification error... treating the abstraction as if it is real...
"needs the THREE to be able to buy THREE bananas..."
Always thought this was the only constructive & relevant criticism of MMT ever since Ramanan brought it up
MMT does not disagree with Niranjan
What about Balance of Payments Constraints/Crises?
https://modernmoney.wordpress.com/faqs-2/#14
Also good thread here: https://twitter.com/J_MoAGoGo/status/1287804666848382978?s=20
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