MMT Responds to Brad DeLong’s Challenge


New Economic Perspectives has the L. Randall Wray article MMT Responds to Brad DeLong’s Challenge.

There isn’t just one excerpt that summarizes the whole article. I picked the following excerpt not quite at random.

So, MMT has always recommended abandoning any attempt to fine-tune the economy through central bank interest rate policy. We prefer a permanently fixed rate. Many MMTers prefer permanent ZIRP. I’m a bit of a fence-sitter. I’d like ZIRP but I’d also accept a policy of paying a higher rate on retirement savings—but that is easily handled through US savings bonds, with personal limits on accumulations receiving the favorable rates. This rate should not be discretionary and should not be used as an inflation-fighting tool, rather as a supplement to Social Security until we can reform that system to provide a decent retirement for all. For me it is the permanent fixing that really matters, and I like a low rate but do not insist on zero.

The article has quite few links that are probably worth mining when I have the time.

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