Lars P. Syll — On the non-neutrality of money

One of Keynes’s central tenets — in clear contradistinction to the beliefs of mainstream economists — is that there is no strong automatic tendency for economies to move toward full employment levels in monetary economies.

Money doesn’t matter in mainstream macroeconomic models. That’s true. But in the real world in which we happen to live, money does certainly matter. Money is not neutral and money matters in both the short run and the long run....

"New Keynesianism" isn't Keynesian. It is bastard Keynesianism if it is Keynesian at all. Paul Krugman self-identifies as "neoclassical," in accepting neutrality of money, banks as only intermediaries, equilibrium, and rational maximization. So do many if not most other Democratic Party economics heavyweights and advisors. Time for them to step aside and make room for the new wave. We don't have time to wait for funerals.

Lars P. Syll’s Blog
On the non-neutrality of money
Lars P. Syll | Professor, Malmo University

Lars P. Syll — Paul Krugman — finally — admits he was wrong!

Globalization not as represented by the free traders, who now have egg on their faces and have to eat crow. To boot, trade was supposedly Paul Krugman's specialty, even though he is best known for witing a popular macro textbook. So he was one of "the experts."

Will the inapplicability of the ISLM "gadget " be next? So far, Paul Krugman is hanging onto it as it crashes and burns.

Lars P. Syll’s Blog
Paul Krugman — finally — admits he was wrong!
Lars P. Syll | Professor, Malmo University

Stephanie Kelton — Modern Monetary Theory Is Not a Recipe for Doom

In this post, Stephanie Kelton takes on Paul Krugman. She appears to agree with Paul Krugman's assumption that monetary policy that is built on raising interest rates to address inflation is not backwards. Actually, central bank interest rate setting is a form of price setting, the policy rate being a variable that sets the cost of borrowing (price of money). Higher interest rates are also inflationary to the degree that increase the income of holders of securities, as Warren Mosler has observed.

Instead she addresses the interest rate simply as a policy variable under central bank control, so the central bank can always insure that "r" is less than "g" to prevent interest on government debt from growing faster than the economy. While that is true, wouldn't it be preferable to show how Krugman's assumption about monetary is more fundamentally mistaken.  This is especially germane since it is not just Krugman's mistake. It is the most commonly held assumption.

Note that Stephanie Kelton does mentions the expansionary impact of higher interest rates directly to Krugman in Paul Krugman Asked Me About Modern Monetary Theory. Here Are 4 Answers. However, it is mentioned in passing rather than being elaborated, as it really need to be in order to finally bury monetarism in any form, strong or weak.

Stephanie Kelton finally addresses this point in another response to Krugman, The Clock Runs Down on Mainstream Keynesianism.

My suggestion is for the MMT economists to put together an elevator speech on this, along with a more complete explanation that is accessible to non-economists and a tightly argued paper for economist and financial types. It's all there in the MMT literature but it needs to be more tightly co-ordinated.

Bloomberg Opinion
Modern Monetary Theory Is Not a Recipe for Doom

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

Lars P. Syll’s Blog Krugman vs Kelton on the fiscal-monetary tradeoff

The battle of the titans. Or maybe better, David and Goliath.

We have to free ourselves from the loanable funds theory — and scholastic gibbering about ZLB — and start using good old Keynesian fiscal policies. Keynes — as did Lerner, Kaldor, Kalecki, and Robinson — showed that it was possible to promote economic growth with an “appropriate size of the budget deficit.” The stimulus a well-functioning fiscal policy aimed at full employment may have on investment and productivity does not necessarily have to be offset by higher interest rates.

Lars P. Syll’s Blog
Krugman vs Kelton on the fiscal-monetary tradeoff
Lars P. Syll | Professor, Malmo University

Stephen Hail — "It is great that Paul Krugman is spending so much time trying to understand MMT…"

It is great that Paul Krugman is spending so much time trying to understand MMT, but I don't think he has escaped from his old ideas sufficiently yet to grapple with these new ones. 

Professor Krugman assumes an inverse relationship between aggregate demand and interest rates which is stable enough to be useful. In other words, he assumes a reasonably stable and downward sloping IS curve. 

No such relationship can be assumed.

Fiscal policy is effective because it adds to or subtracts from the net financial assets of the private sector, in a way that monetary policy does not. Surely, by now, people should be aware of the limitations on the ability of central banks to use interest rates to manage demand. Right now, many central bankers no longer believe interest rate cuts work; they have no faith in quantitative easing; and they are terrified of raising interest rates, due to the well-founded fear that significant increases might undermine asset prices and trigger defaults. 

Mainstream economists have tended to argue that fiscal policy will be ineffective because a higher fiscal deficit necessarily leads to higher interest rates and crowding out of private spending (which is nonsense); or because a deficit today leads to government debt which must be repaid in the future, implying higher taxes in the future, causing people to spend less today (which is an even bigger pile of nonsense).
So yes, mainstream economics is wrong. 

In mainstream economics, monetary policy is a more effective demand management tool than fiscal policy, nearly all the time. 

In reality, fiscal policy is an effective demand management tool and monetary policy isn't. 

Use fiscal policy to manage total spending. 

Leave risk-free interest rates at zero, or close to zero. 

Use financial regulation to limit and influence the direction of credit creation. 

Balance the economy - not the budget. 

And stop drawing IS curves. They don't help.

Modern Monetary Theory- Economics for Sustainable Prosperity (Facebook, membership required)

Stephen Hail | Lecturer, School of Economics, University of Adelaide

Scott Sumner — Magical Thinking

Paul Krugman has a couple of posts criticizing MMT. He tries to be polite, pointing out that at the zero bound their policy recommendations are less bad than those of advocates of austerity. But deep down he must know that this model is sheer madness.

Stephanie Kelton responds, and continues the long MMTer tradition of being unable to provide a clear explanation of the ideas....

Bond vigilantes.

The Money Illusion
Magical Thinking
Scott Sumner | Director of the Program on Monetary Policy at the Mercatus Center at George Mason University, a Research Fellow at the Independent Institute, and Professor Emeritus of Economics at Bentley University

Stephanie Kelton — Modern Monetary Theory Is Not a Recipe for Doom

Now MMT has a bully pulpit, too. The table is still tipped though. But MMT is no longer reduced to rebutting Paul Krugman in his comments section. More progress!

Bloomberg Opinion
Modern Monetary Theory Is Not a Recipe for DoomStephanie 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

Alexander Douglas — Functional Finance for Mainstream Macroeconomists

After reading Paul Krugman’s attempt to grapple with Functional Finance, I happened to browse through Wendy Carlin and David Soskice’s macroeconomics textbook. This book, I should note, comes with the endorsement of Simon Wren-Lewis. I was surprised to find in it the mechanics of Functional Finance clearly explained in terms of the mainstream theory, specifically the ‘3-equation model’ — a version of the ‘New Consensus’ model....

Alexander Douglas at Medium
Functional Finance for Mainstream Macroeconomists
Alexander Douglas | Lecturer in Philosophy, University of St. Andrews

Brian Romanchuk — Functional Finance Versus New Keynesian Economics, Krugman Edition

Paul Krugman has piled onto the "MMT explained by non-MMTers" bandwagon, with a critique of Functional Finance. Functional Finance is largely associated with the Old Keynesian Abba Lerner, and is one of the key intellectual roots of Modern Monetary Theory (MMT). In my view, the most interesting part of the article is that it contradicts the commonly made assertion that there is very little new in MMT (which Krugman hints at in the article as well). In presenting his summary of Functional Finance, Krugman obviously has theoretical blinders on, and the objective of MMTers is to point out the existence of those blinders.…

The fundamental problem with the New Keynesian approach of Paul Krugman, Brad DeLong, Simon Wren-Lewis, etc., is that the model is fundamentally neoclassical rather than Keynesian., only departing somewhat in assumptions but not methodology. This methodology falls into the class formal (mathematical) rather than empirically based and it ignores the role of institutions and operations. As a result, it is either utopian or fitted.

For example, "full employment" in the neoclassical model is defined down to fit the assumptions about "natural rates" that are theoretical constructs and are not observables. The proof is in the pudding and the data reveals that the model only fits special cases, and it doesn't fit the non-trivial aspects of the issue, namely the turning points in the financial and business cycles.

As a result conventional economists missed the most momentous financial and economic event of contemporary times, the global financial crisis, because it was beyond the scope and scale of the model, explained as an "exogenous shock." Other models, in particular the Godley stock-flow consistent model based on accounting that MMT economist did, because such occurrences are within the scope and scale of the model.

Moreover, the remedies for the subsequent recession when the financial crisis went viral and spilled over into the global economy proposed by conventional economists failed. The country that dealt with the crisis successfully used the fiscal approach recommended by MMT economists. That country was China.

MMT economists were all trained in conventional economist in their academic studies and teach it along with other approaches in their classes. They have provided nuanced critics of other systems in their writings by showing the differences between MMT and these approaches, which conventional economists seem not to be aware of. Keynes and other of his followers have also, notably in the Cambridge capital debates in which Piero Sraffa and Joan Robinson defeated Paul Samuelson and Robert Solow, although the inadequacies of the model were not addressed subsequently. In fact, the "Keynesianism" of the New Keynesian synthesis developed and popularized by Samuelson is based on John Hicks' misreading of Keynes, and so the IS-LM model that Paul Krugman loves to cite is not true to Keynes.

The charge that there is nothing new in MMT, or that "we knew that already," are clearly false, as MMT economists have pointed out. So is the charge that the monetarism of the New Keynesian approach is superior to the fiscal approach of MMT. Finally, New Keynesians define down "full employment" to fit the NAIRU model based on dubious assumptions, resulting in a buffer stock of unemployed that involves million of people throughout the cycle.The MMT approach includes actual full employment (less transitional) by using a buffer stock of employed in which the government-set wage provided a price anchor by denominating the hourly wage for unskilled labor in the currency as the government's unit of account.

Bond Economics
Functional Finance Versus New Keynesian Economics, Krugman Edition
Brian Romanchuk

UPDATE

Brad DeLong follows Krugman, although he had aleady offered this criticism some time ago. As the MMT economists point out, this confuses Abba Lerner's approach to functional finance with the MMT approach to it. Similarly, the MMT approach to the JG is not the same as Hyman Minsky's.

Alexander Douglas — Paul Krugman on Functional Finance (UPDATED)

I don't link to the NYT since it stopped being a newspaper. Alex Douglas explains Paul Krugman's criticism there of MMT based on r > g.

This is not a new criticism. It is a neoclassically based argument. It was raised when Thomas Piketty's Capital in the 21st Century made r > g famous.

The expression r > g itself was criticized at the time, and I won't repeat it. Suffice it to say that that is a monetarist view that suffers from the insufficiency of neoclassical assumptions about monetarism, in particular the assumption that interest rates are determinative economically, upon which monetarism is based. Brad DeLong raise this issue, too, if I recall correctly. It also prioritizes interest rates as an economic factor (cause) and policy instrument much higher than the data justifies, and it ignores the difference between currency users that must obtain the currency and the currency issuer, especially when the issuer is sovereign in its currency.

While the model is perfectly logical based on the assumptions, that it is wrong as shown by its being useless other than perhaps in special cases. Of course, it could matter in the special case that Paul Krugman and other conventional economists are chiefly concerned with, inflation. But the monetarist solution involving interest rate setting (NAIRU) works through economic contraction that idles workers to reduce wage pressure. This results in a buffer stock of unemployed.

The idling of real resources amounts to waste that cannot be recaptured, and economic inefficiency is the big sin in neoclassical economics, which leaves economic effectiveness to "market forces" and spontaneous natural order. MMT proposes a solution for that in terms of the MMT JG that maintains full employment (less transitional) while providing a price anchor in the guaranteed wage.

Abba Lerner proposed functional finance in contrast to so-called sound finance, which manifests as fiscal conserativism, for example. It is grounded monetarist thinking, the idea being that fiscal imprudence will generate inflation that will result in the bond vigilantes driving up the interest rate they demand to lend money, assuming loanable funds and crowding out. Government, having lost control of the interest on its debt will be driven to insolvency if it doesn't adopt draconian measures that "restore confidence" to financial markets. "Sound finance" is has therefore been a cornerstone of finance capitalism in addition to neoclassical economics, which serves as its academic justification.

One of the foundations of functional finance in its rejection of "sound finance" is that monetarism upon which sound finance is based is not only ineffective but also based on false assumption (which is a reason it doesn't work). This is revealed by a correct operational understanding of government finance built on a correct theory of money. Neoclassical (conventional) economics miss the target here. Even the Fed recently admitted that it has no good theory of inflation. This implies that monetary policy is discretionary rather than rule-based, since a rule-based policy requires a good theory articulated in a model.

Hint: Mono-causal theories are generally insufficient at explanation in complicated simple systems and a fortiori in complex adaptive systems. The reliance on "expectations" shows that the Fed understand that the finance and the economy are aspects of a complex adaptive system. Any mono-causal explanation is likely to be inadequate to the task of predicting, and monetary policy is based on the ability to forecast. Barking up the wrong tree.

The good news though is that Paul Krugman continues to move toward the MMT position. Progress!

Alexander Douglas at Medium
Paul Krugman on Functional Finance
Alexander Douglas | Lecturer in Philosophy, University of St. Andrews

UPDATE

Paul Krugman is out with a follow-up piece at the NYT, to which I don't link, calling for "spend and tax" rather than interest rate setting.

Identical with the MMT position, if Krugman understood it, or was even aware of the exchanges on Twitter these days.

The MMT position as Stephanie Kelton stated in succinctly on Twitter is that spending must be offset as the economy reached optimal capacity as indicated by approaching full employment. Taxation is one offset. Others are available.

See also

Angry Bear
I actually disagree with Paul Krugman for once

Robert Waldmann

Lars P. Syll — Polanyi and Keynes on the idea of ‘self-adjusting’ markets

Paul Krugman still wrong. The mainstream model of an economy based on general equilibrium, rational utility maximization, and money neutrality is one of a possible world that doesn't exist and can't exist in a monetary production economy.

There is nothing wrong with constructing models of possible worlds, and, in fact, all models exist in possibility space, not real space. But it is wrong to claim or imply that such models of possible worlds apply to the real world when there is evidence that they do not. This is what science is about, and it is the difference between doing science and doing mathematics.

Conventional economic theory is largely mathematical with an impeccable logic pedigree from axioms, but it not scientific in that it lacks an empirical warrant. The models are attractive but vacant.

Lars P. Syll’s Blog
Polanyi and Keynes on the idea of ‘self-adjusting’ markets
Lars P. Syll | Professor, Malmo University

Nathan J. Robinson — Liberalism And Empire

Krugman believes that Trump is threatening to destroy America’s great “empire” and that this is bad, because our country’s “empire” is good and noble. Trump, Krugman suggests, is an aberrant departure from the lofty values and ideals that have guided our foreign policy for most of the past century.

Unfortunately, Robinson doesn't cite the warning of the founding fathers about avoiding entangling alliances, and that failure to do so would insert the fledging US into the same politics as Europe, with the ensuing wars. Not only was there a long history of the dynamic in Europe at the time, but WWI would demonstrate this again, resulting in the remaking of the map of Europe and initiating a new historical period that would see WWII and many related conflict thereafter.

It is our true policy to steer clear of permanent alliance with any portion of the foreign world — George Washington, Farewell Address (1796)

Peace, commerce, and honest friendship with all nations-entangling alliances with none. — Thomas Jefferson, First Inaugural Address (1801)

The US did not sign any permanent treaties of alliance prior to WWII, after which the United Nations, the UNSC, the IMF, the World Bank, etc. were established as permanent international organizations, and NATO was established as a permanent military alliance that is still expanding. The US now has a global military presence with attendant commitments.

Where is Paul Krugman coming from? He is talking out of his field. And he is not alone. 

These people seem unaware of American history and what the long-standing policy of the US was prior to WWII, not to mention the values and thinking on which this policy stance was based. These values and thinking were instrumental in the undertaking of rebellion against British rule, the ensuing American Revolution, and the founding of the American Republic. 

But the US could not avoid the imperialistic urge at the close of the rush for colonies by the competing European powers. But about all that was left then was the Philippine Islands.

Woodrow Wilson also broke with the tradition of staying out of European affairs by involving the US in the (failed) League of Nations. This attempt at internationalism lead to the establishment of international institutions that would later undermine national sovereignty and present the opportunity for neo-imperialism through their control. NATO was a military entangling alliance that commits the members to go to war on behalf of any member that is attacked by a non-member.

The Federal Reserve System was also established under Wilson (Dec. 1913). This would lead the US into entanglement with the other central banks and financial interests through the establishment of the Bank of International Settlements.*

Just what is "American" about this? What is treasonous about attempting to follow the warnings of the founding fathers and early presidents about entangling alliances and avoiding foreign wars unless in defense of vital national interests. I haven't seen anything remotely like the mission of American to spread freedom and democracy or American values in the founding documents or the debates about their formulation. Who is being out of line here? America Firsters like Trump, or neocons that gave the us Iraq or the liberal internationalists that gave us Vietnam, both wars of choice.

Oh, and there there is this.

Vladimir Ilyich Lenin, Imperialism, the Highest Stage of Capitalism. But Lenin couldn't possibly have known anything about what he was addressing, right?

Current Affairs
Liberalism And Empire
Nathan J. Robinson | Editor of Current Affairs

* The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank... sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."   

Carroll Quigley, Tragedy and Hope: A History of the World in Our Time. New York: The Macmillan Company, 1966, VII, page 324.

Carroll Quigley (1910-1977) | Professor of History at Georgetown University, member of the Council on Foreign Relations (CFR), mentor to Bill Clinton.

This quote begins a section of the chapter on the BIS.

Tragedy and Hope and other Quigley works are available at archive.org and his site.

Ramanan — Contrasting Joan Robinson And Paul Krugman’s Views On The Global Rules Of Trade

Interesting quote from Joan Robinson.

The Case for Concerted Action
Contrasting Joan Robinson And Paul Krugman’s Views On The Global Rules Of Trade
V. Ramanan

Also

Bill Mitchell competed on the Joan Robinson quote.

While Bill is obviously correct, the world continues to operate as if still on Bretton Woods, with the resulting being neo-mercantilism.

Robert Skidelsky — How [Conventional] Economics Survived the Economic Crisis

How did conventional economics survive the crisis? Handwaving.

Criticism of Paul Krugman and New Keynesian economics, which is based on "rational behavior and market equilibrium as a baseline" (Krugman).

Skidelsky concludes, "Macroeconomics still needs to come up with a big new idea." 

I would rephrase that as "a new big idea." Theories are based on a "big idea" that constitutes the architecture of the framework. Rationality and equilibrium isn't it.

Project Syndicate
How [Conventional] Economics Survived the Economic CrisisRobert Skidelsky | Professor Emeritus of Political Economy at Warwick University, fellow of the British Academy in history and economics, member of the British House of Lords, and author of a three-volume biography of John Maynard Keynes

Mark Thoma — Paul Krugman: Fascism, American Style

The cards are on the table, and the battle lines are drawn.

Note: I am linking to the Krugman piece through Economist's View rather than providing a link to the New York Times, to which I refuse to link owing to what I consider ongoing bad behavior.

Economist's View
Paul Krugman: Fascism, American Style
Mark Thoma

Lars P. Syl — The loanable funds hoax

Zombie theory.

Lars P. Syll’s Blog
The loanable funds hoax

Krugman and Mankiw on loanable funds — so wrong, so wrong
Lars P. Syll | Professor, Malmo University

David F. Ruccio — Globalization—how did they get it so wrong?

There is perhaps no more cherished an idea within mainstream economics than that everyone benefits from free trade and, more generally, globalization. They represent the solution to the problem of scarcity for the world as a whole, much as free markets are celebrated as the best way of allocating scarce resources within nations. And any exceptions to free markets, whether national or international, need to be criticized and opposed at every turn.

That celebration of capitalist globalization, as Nikil Saval explains, has been the common sense that mainstream economists, both liberal and conservative, have adhered to and disseminated, in their research, teaching, and policy advice, for many decades.

Today, of course, that common sense has been challenged—during the Second Great Depression, in the Brexit vote, during the course of the electoral campaigns of Bernie Sanders and Donald Trump—and economic elites, establishment politicians, and mainstream economists have been quick to issue dire warnings about the perils of disrupting the forces of globalization.

I have my own criticisms of Saval’s discussion of the rise and fall of the idea of globalization, especially his complete overlooking of the long tradition of globalization critics, especially on the Left, who have emphasized the dirty, violent, unequalizing underside of colonialism, neocolonialism, and imperialism.

However, as a survey of the role of globalization within mainstream economics, Saval’s essay is well worth a careful read....

Occasional Links & Commentary
Globalization—how did they get it so wrong?
David F. Ruccio | Professor of Economics, University of Notre Dame

J. W. Mason — What Does Crowding Out Even Mean?

In terms of a model, "crowding out" means that increasing the value of one variable diminishes the value of another or other variables.

This occurs in a model of an idealized or stylized world. If the claim is the the ideal or stylized world corresponds to the real world with respect to the factors involved, then it becomes an empirical question that requires examination of data and measurement.

So the first questions are about the model. What assumptions does it depend on?

The next question is whether the assumptions apply to the real world that the model putatively represents. Do the functions adequately represent actual transmission mechanisms?

The question after than is whether is too simplistic to be useful in assessing the real world situation(s) involved in the debate that are in question, e.g., relating to policy formulation or decision making.

This involves distinguishing between general case and specific cases. A general case model may not hold locally owing to institutional arrangements, for example, voluntary political imposition of a debt ceiling limits the general case based on operational analysis of a general system by limiting fiscal space arbitrarily.

Below, I run through six possible meanings of crowding out, and then ask if any of them gives us a reason, even in principle, to worry about over-expansionary policy today. (Another possibility, suggested by Jared Bernstein, is that while we don’t need to worry about supply constraints for the economy as a whole, tax cuts could crowd out useful spending due to some unspecified financial constraint on the federal government. I don’t address that here.) Needless to say, doubts about the economic case for crowding-out are in no way an argument for the specific deficit-boosting policies favored by the new administration.

This is definitely a should-read for people interested in MMT and policy.

I don't want to provide a spoiler — the points are summarized after the explanation — but it may be easier to grasp the points by knowing them beforehand.

So now we have six forms of crowding out:
1. Government competes with business for fixed saving.
2. Government competes with business for scarce liquidity.
3. Increased spending would lead to higher inflation.
4. Increased spending would cause the central bank to raise interest rates.
5. Overfull employment would lead to overfast wage increases.
6. Increased spending would lead to a higher trade deficit.

The next question is: Is there any reason, even in principle, to worry about any of these outcomes in the US today? We can decisively set aside the first, which is logically incoherent, and confidently set aside the second, which doesn’t fit a credit-money economy in which government liabilities are the most liquid asset. But the other four certainly could, in principle, reflect real limits on expansionary policy. The question is: In the US in 2017, are higher inflation, higher interest rates, higher wages or a weaker balance of payments position problems we need to worry about? Are they even problems at all?

J. W. Mason's Blog
What Does Crowding Out Even Mean?
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York

Brian Romanchuk — ZLB, R.I.P.

Even if one is not a fan of President-elect Trump, one must be impressed how he managed to shift expectations to end secular stagnation. With the Zero Lower Bound (ZLB) now dead as a door-nail, it is going to be difficult for mainstream economists to make it look like Dynamic Stochastic General Equilibrium (DSGE) models have something useful to tell us about the real world.

This article first discusses some of the academic theoretical issues around the ZLB, and then jumps to the latest economic squabbling based on Paul Krugman's recent comments.

Bond Economics
ZLB, R.I.P.
Brian Romanchuk

Ellis Winningham — Deficits Matter, Paul Krugman Doesn’t

Okie dokie. So, I awoke somewhere around 4:15 am to finish tearing into Krugman’s latest drivel, when I discovered that Bill Mitchell beat me to the punch. Good deal. I’ve spent some time this morning re-writing my article so that Krugman takes a hit on two fronts: Mitchell knocks him down, and I kick him….

Ellis Winningham — MMT and Modern Macroeconomics
Deficits Matter, Paul Krugman Doesn’t
Ellis Winningham