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I'll give an example: MMTers really like the Keynes quote "anything we can actually do, we can afford." Their critics say: It's a Keynes quote! So it's something the Keynesians knew. But in years of reporting with Keynesian economists, it is definitely not how they talked.

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There was *far* more discussion in the 2010s of debt-to-GDP ratios and Reinhart/Rogoff than of the real productive limits of the economy, and where we were in relation to them.

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So one debate about MMT is whether it should be understood as an economic framework or a theory of political economy. I deal with it more in its latter incarnation, and at least in that guise, it's definitely forced the, let's say, rediscovery of certain truths.

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‎The Gray Area with Sean Illing: Why should we care about deficits? auf Apple Podcasts

Back at Vox, I hosted a discussion between

@jasonfurman

and

@StephanieKelton

that I think makes for very interesting listening now, on all sides.

podcasts.apple.com

‎Sendung The Gray Area with Sean Illing, Folge Why should we care about deficits? – 21. Feb. 2019

11:17 PM · Feb 7, 2022

Replying to

What interests me about MMT right now is that they always warned inflation was the danger, real resources the constraint, but they did so when inflation was an abstraction. Now that it's not an abstraction, I think they're having as much trouble as everyone else responding.

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Politically, I think there are real criticisms to be made, particularly of how they often let their theory be framed as an argument for endless spending. So I half agree with Jason here.

Quote Tweet

Jason Furman

@jasonfurman

All economics says this, not distinctive to MMT. What is distinctive to MMT is that it pairs this theoretical observation with an empirical belief that the real resource constraint is in practice virtually never binding. That was dramatically falsified. twitter.com/TheStalwart/st…

And generally, the people I trust most are pretty critical of their macroeconomic models, so I'm skeptical there, too.

But also: those same people will eventually admit to you that most macroeconomic models are pretty bad. If you can really figure out macroeconomic modeling, I want to invest in your hedge fund.

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Is This What Winning Looks Like?

But I'm annoyed at the gatekeeping response to my colleague

@jeannasmialek

's interesting piece, and the lack of self-reflection on why the MMT critique found traction, and what in it proved important. So I think you should read the piece.

nytimes.com

Modern Monetary Theory, the buzziest economic idea in decades, got a pandemic tryout of sorts. Now inflation is testing its limits.

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