The Fed and "inflation."
The LensRead My Lips
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders
Stephanie Kelton | Professor of Public Policy and Economics at Stony Brook University, formerly Democrats' chief economist on the staff of the U.S. Senate Budget Committee, and an economic adviser to the 2016 presidential campaign of Senator Bernie Sanders
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Kelton says nothing about the fact that rate hikes are price hikes: they raise the general price level. Examples are Argentina, Turkey, etc. Only Mosler (and myself) have been saying these things. Kelton is purportedly an MMT scholar. However, she appears more and more mainstream in her comments. No MMT pushback or explanation refuting the Fed's strategy.
ReplyDeleteMike you and Warren are not in the academe…
ReplyDeleteAcademic practice is the main problem here….
The liberal Art side of the academe is very limiting…
Stephanie's strategy with MMT is about making it seem more mainstream so that it fits with the Democrat grouping she's looking to influence.
ReplyDeleteThe US is stuck with PAYGO and debt ceilings, but has the exorbitant advantage of having lots of countries outside the US jurisdiction that peg to the dollar - and therefore where the US can export its unemployment. Shifting the stabilisation policy to a fixed anchor isn't on the agenda. The US is too far behind the rest of the world.
That influences the twist she puts on what she's saying, but means what she's saying is counterproductive in the rest of the world - where interest rates are 'forced' to follow the US lead regardless of whether that is what is required locally.
Outside the dollar zone we need a practical alternative to interest rates as the stabilisation policy.
Increasing the interest rate DEstabilizes the system…
ReplyDeleteUnless you believe “stability creates instability!” or some similar paradox nut job thesis…