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Thursday, February 10, 2022

What Would Modern Monetary Theory Do About Inflation? — Clive Crook

On balance positive, but Clive Crook is apparently unaware of the deeper MMT analysis of inflation control. Hint: it is not just raising taxes, as many presume from MMT 101. 

But the confusion indicates more work needed on educating both professionals and the public on MMT's stance on inflation and how it applies to the current situation. Stephanie Kelton has the megaphone so it is probably chiefly up to her.

Anyway, worth reading. being an op-ed, it's pretty short.

Bloomberg Opinion
What Would Modern Monetary Theory Do About Inflation?
Clive Crook
https://www.bloomberg.com/opinion/articles/2022-02-10/inflation-continues-to-surge-what-would-mmt-followers-do

https://www.forbes.com/sites/benritz/2022/02/10/mmt-isnt-taking-a-victory-lap--its-on-its-last-legs/
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5 comments:

  1. Ahmed FaresFebruary 11, 2022 at 1:01 AM

    The JG anchors inflation, as explained here in an article by Dylan Matthews:

    Setting the JG wage at the minimum wage is important for anchoring inflation. In tight labor markets, employers sometimes choose to increase wages and pay for the change with higher prices, setting off inflation. But if the JG wage is tethered to the minimum, then employers always have the option of hiring workers from the JG pool, who, under the theory, can be hired at the low fixed wage given to them in the JG program. That gives them a way to avoid raising wages and setting off price increases. “There can be no inflationary pressures arising directly from a policy where the government offers a fixed wage to any labor not wanted by other employers,” the textbook authors write.

    Modern Monetary Theory, explained

    ReplyDelete
  2. mike normanFebruary 11, 2022 at 6:37 AM

    Two things could be done right off the bat. First, remove the Trump tariffs. Those were ill advised in the first place. Second, ban petroleum exports. That would help contain energy price increases.

    ReplyDelete
  3. Matt FrankoFebruary 11, 2022 at 7:33 AM

    End the ESG policies the climate nutters have weaseled into credit provision…

    ReplyDelete
  4. Matt FrankoFebruary 11, 2022 at 7:36 AM

    https://www.bloomberg.com/news/articles/2021-10-13/trillion-dollar-esg-boom-is-punishing-old-school-energy-stocks

    Climate nutters in control….

    Going to have to wait until GOP Congress or Trump gets back in there to cancel all of this..,,

    ReplyDelete
  5. Peter PanFebruary 11, 2022 at 7:48 AM

    Fossil fuel consumption will rise nevertheless. No one is paying full price.

    ReplyDelete