SMP: Galbraith Offers a Poor Defense of MMT

Modern Monetary Theory (MMT), which claims that a country issuing debt denominated in its own currency can finance a large amount of government spending by issuing debt or printing money without worrying much about a debt crisis or high inflation rates, has grown in popularity on the political left in recent years. But it has failed to gain much support in the economics profession. That is largely due, in my view, to problems with the theory. But the poor defense routinely offered by its more prominent advocates also contributes. James K. Galbraith’s recent article serves to illustrate.

“As anyone who has ever been responsible for legislative oversight of central bankers knows,” Galbraith begins, “they do not like to have their authority challenged. Most of all, they will defend their mystique – that magical aura that hovers over their words, shrouding a slushy mix of banality and baloney in a mist of power and jargon.” Their negative reactions to MMT can be dismissed, he implies, as self-serving efforts to maintain control. After all, MMT represents what central bankers fear: a “popular, accessible, and democratic” theory.

Continue reading at AIER.

La familia keynesiana…

Algunos comentarios menores:

Me cuesta ver a la Nueva Macroeconomía Clásica de las expectativas racionales integrando la familia keynesiana. ¿Son Robert Lucas, Edward Prescott y Robert Barro keynesianos en algún sentido?

En la síntesis neoclásica (neo-keynesianos) me parece que Hicks  y Samuelson resultan centrales. Pero quizás Stiglitz poco a poco va abandonando el barco de la síntesis neoclásica. Algunos de sus últimos artículos son lo suficientemente críticos de la macroeconomía moderna como para continuar perteneciendo a este grupo mainstream.

Entre los keynesianos ortodoxos (post-keynesianos), no podía faltar Joan Robinson, pero me parece que Minsky debiera recibir hoy la mayor atención.

Me ha sorprendido la ausencia de figuras centrales del keynesianismo del siglo XX, especialmente John Galbraith y Axel Leijonhufvud.