economy MMT

Our Fiscal Future: MMT And Stimulus At The Limits Of Central Bank Omnipotence

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The topic du jour.
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4 comments on “Our Fiscal Future: MMT And Stimulus At The Limits Of Central Bank Omnipotence

  1. I appreciate all the articles here, but admit I’m lucky if I understand half of it. As I consider the opinions of people a lot smarter than me, I can’t get away from the basic idea that the market recovered after 2008 because lots of liquidity was added and it falters every time the system tries to remove it. Are all other factors/explanations constrained by this?

  2. MMT in theory could be achieved also by inflating assets, if those assets were owned by everybody. After asset inflation the CBs buy the assets sold by the public, and money is created, ending in the pockets of everybody.
    But as things are, namely assets owned by a minority, asset inflation is useless for the economy.
    What CBs may try to do is the opposite: trigger an asset deflation, a stock market bear pushing prices down 70%. At that point, being prices again cheap, the general public could buy stocks and CBs might reflating them, wealth by means of stock ownership would become widespread.

    • Franceska, That is good thinking, but when asset prices come down the pension funds around the world will collapse causing major social problems, hence pumping money is the only way forward until some presently unknown event forces a turn of the trend….

  3. Gents, ladies, I find it unbelievable that Mr. Hiatzius is still claiming that Japan could benefit from money printing or running large financial deficits after all they have done already (see Chart 43 above). It clearly shows that even the supposedly smart people do not want to state the truth that we are on the end of the line of this financial game. However these financial goeroes need to stay positive because being negative does not help much either in their job…… Thanks for the article!

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