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.
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