{"id":19370,"date":"2015-01-12T21:43:13","date_gmt":"2015-01-13T02:43:13","guid":{"rendered":"http:\/\/ssgreenberg.name\/PoliticsBlog\/?p=19370"},"modified":"2015-01-12T21:45:42","modified_gmt":"2015-01-13T02:45:42","slug":"replacing-the-budget-constraint-with-an-inflation-constraint","status":"publish","type":"post","link":"https:\/\/ssgreenberg.name\/PoliticsBlog\/2015\/01\/12\/replacing-the-budget-constraint-with-an-inflation-constraint\/","title":{"rendered":"Replacing the Budget Constraint with an Inflation Constraint"},"content":{"rendered":"<p><em>New Economic Perspectives<\/em> has the article <a title=\"New Economic Perspectives article\" href=\"http:\/\/neweconomicperspectives.org\/2015\/01\/replacing-budget-constraint-inflation-constraint.html\" target=\"_blank\">Replacing the Budget Constraint with an Inflation Constraint<\/a> by Scott Fullwiler. This is another example of what a terrific job that Fullwiler does to dispel the misconceptions many people have about MMT (Modern Money Theory).\u00a0 Below are some excerpts that give you just a hint of what you might learn if you read the article at the above link.\u00a0 Let me further assure you that this article is not nearly as technical as was the Fullwiler discussion mentioned in my previous post <a title=\"Previous post\" href=\"http:\/\/ssgreenberg.name\/PoliticsBlog\/2015\/01\/10\/scott-fullwiler-paul-krugman-the-conscience-of-a-neo-liberal\/\" target=\"_blank\">Scott Fullwiler: Paul Krugman\u2014The Conscience of a Neo-Liberal?<\/a>.<\/p>\n<blockquote><p>As argued bazillions of times, the real point MMT is making is that the government\u2019s budget constraint is the wrong constraint\u2014the correct constraint is whether or not a particular budget position will raise inflation beyond an official target rate (say, 2%, which seems to be the choice of most central bankers).<\/p>\n<p>Let me explain to Mr. Worstall and others how this could work rather easily\u2014 &#8230;<br \/>\n.<br \/>\n.\u00a0\u00a0\u00a0\u00a0 [explanation in the article itself]\n<br \/>.<br \/>\nWe could add quite a bit of detail here if we want, but I\u2019ll just say a few more things. First, it\u2019s quite clear that economists don\u2019t have much expertise modeling how to use the government\u2019s budget stance to manage the macroeconomy via a functional finance rule\u2014but this is largely because they have come to view monetary policy as the main macroeconomic policy tool, not because it\u2019s not possible.<br \/>\n.<br \/>\n.<br \/>\n.<br \/>\nIn sum, let\u2019s stop pretending that replacing a budget constraint with an inflation constraint is so hard. It involves a change in perspective, nothing more and nothing less. It doesn\u2019t give license to policy makers to do whatever they want.<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New Economic Perspectives has the article Replacing the Budget Constraint with an Inflation Constraint by Scott Fullwiler. This is another example of what a terrific job that Fullwiler does to dispel the misconceptions many people have about MMT (Modern Money Theory).\u00a0 Below are some excerpts that give you just a hint of what you might [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[166],"tags":[],"class_list":{"0":"post-19370","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-stevegsposts","7":"czr-hentry"},"_links":{"self":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/19370","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/comments?post=19370"}],"version-history":[{"count":5,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/19370\/revisions"}],"predecessor-version":[{"id":19375,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/posts\/19370\/revisions\/19375"}],"wp:attachment":[{"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/media?parent=19370"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/categories?post=19370"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ssgreenberg.name\/PoliticsBlog\/wp-json\/wp\/v2\/tags?post=19370"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}