Bill Mitchell – My response to a German critic of MMT – Part 3

This is the third (and final) part of my response to an article published by the German-language service Makroskop (March 20, 2018) – Modern Monetary Theory: Einwände eines wohlwollenden Zweiflers (Modern Monetary Theory – Questions from a Friendly Critic) – and written by Martin Höpner, who is a political scientist associated with the Max-Planck-Institut für Gesellschaftsforschung (Max Planck Institute for Social Research – MPIfG) in Cologne. Today, we will discuss inflation and round up the evaluation of his input to the debate. The overriding conclusion is this. As a researcher, I am instinctively driven to dig deep before I make public comment. It is easy to think you have an idea that is novel and then venture forth with it. One usually finds, fairly quickly, once you start digging into the literature, that the idea is anything but novel. Modern Monetary Theory (MMT) has been around for around 25 years now (give or take) but has really only gained traction in this era of social media (blogs, tweets, YouTube, etc). When I make presentations to a new audience I am regularly asked the same questions, over and over. Which is understandable in a public forum. But I expect researchers, especially those associated with highly credible institutions such as the Max Planck Institute in Köln, to first of all do their research before they make public comment. Many of the issues raised in the Makroskop article have been ‘done to death’ over the last 25 years. Many academic and non-academic articles have been written by us on these issues. One may not agree with the conclusions or our analysis but raising them as if we have never thought about them or discussed them in rather minute detail is not a very ‘friendly’ strategy.

Bill Mitchell – billy blog
My response to a German critic of MMT – Part 3
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — My response to a German critic of MMT – Part 2

This is the second part of my response to an article published by the German-language service Makroskop (March 20, 2018) – Modern Monetary Theory: Einwände eines wohlwollenden Zweiflers (Modern Monetary Theory – Questions from a Friendly Critic) – and written by Martin Höpner, who is a political scientist associated with the Max-Planck-Institut für Gesellschaftsforschung (Max Planck Institute for Social Research – MPIfG) in Cologne. In this part we discuss bond yields and bond issuance. I had originally planned a two-part series but the issues are detailed and to keep each post at a manageable length, I have opted to spread the response over three separate posts. In Part 3 (next week) we will discuss inflation and round up the evaluation of his input to the debate....

Bill Mitchell – billy blog
My response to a German critic of MMT – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — My response to a German critic of MMT – Part 1

Makroskop is a relatively new media publication in Germany edited by Heiner Flassbeck and Paul Steinhardt. It brings some of the ideas from Modern Monetary Theory (MMT) and other analysis to German-language readers. It is not entirely sympathetic to MMT, differing on the importance of exchange rates. But it is mostly sympathetic. I declined to be a regular contributor when invited at the time they were starting the publication not because I objected to their mission (which I laud) but because their ‘business model’ was a subscription-based service and I consider my work to be open source and available to all, irrespective of whether one has the capacity or the willingness to pay. But I have agreed to contribute occasionally if the material is made open source, an exception to their usual material. Recently, the editors approached me to respond to an article they published from a German political scientist – Modern Monetary Theory: Einwände eines wohlwollenden Zweiflers or in English: Modern Monetary Theory – Questions from a benevolent doubter. The article constitutes the first serious engagement with MMT by German academics and thus warrants attention. Unfortunately the article is behind a paywall. I have asked the editors to make it open to all as a condition for allowing a translation of this response into German to be published on their site. If that doesn’t happen, you will still be able to glean what the main issues raised in the German article were by the way I have written the English response. The issues raised are of general interest and allow some key principles of MMT to be explicated, which explains why I have taken the time to write a two-part response. Today is Part 1....

Bill Mitchell – billy blog
My response to a German critic of MMT – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia