How Modern Monetary Theory (MMT) Actually Works (w/ Warren Mosler)



Modern Monetary Theory has become a hot topic of discussion. But is it well understood? In this interview with Real Vision’s Ed Harrison, Warren Mosler, the …

23 Comments

  1. This is most scientific economic theory I ever heard— draw from observations already happening without invoking a perfect invisible hand. To test the validity of MMT is to come up a new predictions. The question is whether politicians have wisdom and guts to start a social experiment. Unless a society is at the brink of a revolution, it’s not going to happen.

  2. I have studied MMT for 4 years. I agree with 99% of MMT, but the idea that higher rates are stimulus is RIGHT ceteris peribus, but it is WRONG in reality. After 40 years of Fed puts and multiple expansion in the stock market, if interest rates are raised, APPL would be trading at 12 times earnings at 5% interest rates rather than 35 times earnings at 0% rates and QE. Imagine if everyone woke up and there stock portfolios were down 50%! Higher interest rates would also tank real estate and yes, money would flow from the gov to the private sector thru bonds, but net worth would crater and this would be restrictive, not strimulative. Someone please tell me why I am wrong

  3. MMT's co founders Mitchell and Mosler both emphasise that it is merely a framework to view the economy through, rather than something that is left or right. Kelton probably pushes it being a little more progressive than they do.

  4. Mosler is incredible, as are the ideas he started with Mitchell to create the groundwork, but he claims MMT says they don't have a problem with the barter story, yet MMT economist L Randall Wray says there's never been any evidence to support civilised economies using barter exchange, so MMT does, rightly, have a problem with the barter myth. Great interview though. MMT has a strong internal logic that has an answer for most things and certainly more answers than a system that, as Mosler says, doesn't understand how monetary operations work.

  5. The job guarantee is anti-inflationary because there's a ready pool of usable workers who've been employed by the state, and so aren't "rotting seed corn". 🤔 Explain the reunification of Germany. Why weren't all the Osties – East Germans – immediately BMW assembly line workers?

  6. In the UK the money is created by the commercial banks lending it into existence, under authority by the central bank, secured against property, and the banks make losses if they make bad loans. The Bank of England's own operations in support of government policy involve creating money out of thin air, buying bonds, but cancelling that money as the interest and capital comes in: so-called QE. So none of this stuff makes a blind bit of difference to anything.

  7. This is just amusing at this point. As the economies of fiat currencies continue to drive themselves into economic ruin, more academics and government economists policy advisors tout the policies that drive themselves into economic policy.

Leave a Reply

Your email address will not be published.


*


15 − = 5