Friday, 2 August 2013
MMTers need to think about exactly how to merge monetary and fiscal policy.
Advocates of Modern Monetary Theory (MMT) don’t view interest rate adjustments too favourably. They tend to advocate stimulus in the form of having the government / central bank machine simply create new money and spend it into the economy (and/or cut taxes).
Positive Money and other advocates of full reserve advocate the same, but PM & Co have thought through the best way to actually effect the latter policy. MMTers should take note.
More on this topic in an article by yours truly here.