Reminder that MMT is based on availability of real resources for sale (stuff), not their nominal values in the market (prices). In monetary production societies, economics is the study of the production, distribution and consumption of goods rationed by price in markets. Price is therefore more closely related to quantities of goods instead of quantity of money. Monetarists are deluded about this.
New Wayland Blog
The UK Energy Crisis: an MMT Analysis
NeilW
4 comments:
4. Lift the sanctions on Russia.
“ Monetarists are deluded about this.”
What are they “deluded” about?
To them, “money supply!” is up and so are prices…
Looks like their theory is correct…
What are they “deluded” about?
To them, “money supply!” is up and so are prices…
Monetarists have the causality backwards when they say that "money printing" causes inflation. In actuality, inflation causes "money printing" and not the other way around.
Yes, that is true; Henwood adopts the Monetarist explanation that “too much money” causes inflation. He confuses causation and correlation. Severe supply constraints can push up prices, increasing the amount of money that needs to be created both publicly and privately to finance purchases. Tax revenues fall behind spending so a deficit opens up as spending tries to keep pace with inflation. The money stock is a residual and it will grow rapidly with hyperinflation. That does not mean it is the cause. Mitchell has closely examined the hyperinflation cases from the MMT perspective; the argument is not at all odd and has the advantage that it is fact-based, unlike Henwood’s Monetarist linking of money and inflation that has been so thoroughly discredited that even central bankers have dropped it. —L. Randall Wray
“ that even central bankers have dropped it. —L. Randall Wray”
no they haven’t they are using their theory RIGHT NOW to lower their “inflation!”
Wishful thinking from Wray here…
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