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My View on MMT

Updated – 2018:

In 2011 I was briefly associated with a group of economists who advocate for a theory called “Modern Monetary Theory”. Paul Krugman even cited an early draft version of a popular paper of mine as a MMT paper. This paper is not a MMT paper although an early draft cited aspects that were consistent with MMT. The paper is not a representation of MMT’s views and I have never fully endorsed MMT.

That said, I am sympathetic to some MMT ideas (like endogenous money theory), but I’ve never fully agreed with MMT as a whole and in fact believe there are elements of MMT that are wrong. In fairness, there are also elements I think are useful. I’ve outlined those views in a post here. I’ve also written an extensive critique of MMT here. On the whole I find MMT to be an eye opening and useful theory to understand, but I do worry that some of their ideas are a bit extremist and twist the operational realities of our monetary system in an effort to promote progressive policy ideas.

I hope you find the attached material helpful.

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