Wednesday, 11 December 2013
Is Brad DeLong now an MMTer?
This article of his argues for combining monetary and fiscal policy: that is funding fiscal stimulus with new money (central bank money, or “monetary base”). Now that’s what most MMTers favour I think.
And Richard Werner, Positive Money and the New Economics Foundation argue for that policy here.
P.S. (12th Dec. 2013). On the subject of MMTers tending to favour “funding fiscal stimulus with new money”, see this article by two leading MMTers, Scott Fullwiler and Stephanie Kelton. As they put it, “…there is no reason for the government to sell bonds at all. We can stop today.” In other words it would be perfectly feasible to have a system under which the government / central bank machine simply created new money and spent it (and/or cut taxes) when stimulus is needed.