Tuesday, January 7, 2014

MMT and the zero bound.

Simon Wren-Lewis(Oxford economics prof.) suggests that at the zero bound, stimulus should be part monetary and part fiscal. Well now that mix of monetary and fiscal is what advocates of Modern Monetary Theory want, I think. Plus it’s what Positive Money and co-authors of this workwant. At least the latter two groups want stimulus to take the form of simply creating new money and spending it (and/or cutting taxes).
Glad we’re all agreed on that.

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