Money, fiscal policy, and interest rates: A critique …

1 money , fiscal policy , and interest rates : A critique of Modern Monetary Theory Abstract This paper excavates the set of ideas known as modern monetary theory (MMT). The principal conclusion is that the macroeconomics of MMT is a restatement of elementary well-understood Keynesian macroeconomics. There is nothing new in MMT s construction of monetary macroeconomics that warrants the distinct nomenclature of MMT. Moreover, MMT over-simplifies the challenges of attaining non-inflationary full employment by ignoring the dilemmas posed by Phillips curve analysis; the dilemmas associated with maintaining real and financial sector stability; and the dilemmas confronting open economies. Its policy recommendations also rest on over-simplistic analysis that takes little account of political economy difficulties, and its interest rate policy recommendation would likely generate instability.

1 Money, fiscal policy, and interest rates: A critique of Modern Monetary Theory Abstract This paper excavates the set of ideas known as modern monetary theory (MMT).

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  Policy, Rates, Interest, Fiscal, Money, Fiscal policy, And interest rates

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