{"id":393,"date":"2014-02-17T09:50:35","date_gmt":"2014-02-17T16:50:35","guid":{"rendered":"http:\/\/www.thomaspalley.com\/?p=393"},"modified":"2019-01-06T08:08:40","modified_gmt":"2019-01-06T15:08:40","slug":"modern-money-theory-mmt-the-emperor-still-has-no-clothes","status":"publish","type":"post","link":"https:\/\/thomaspalley.com\/?p=393","title":{"rendered":"Modern money theory (MMT): the emperor still has no clothes"},"content":{"rendered":"<p>Eric Tymoigne and Randall Wray\u2019s (T&amp;W, 2013) defense of MMT leaves the MMT emperor even more naked than before (excuse the Yogi Berra-ism). The criticism of MMT is not that it has produced nothing new. The criticism is that MMT is a mix of old and new, the old is correct and well understood, while the new is substantially wrong. Among many failings, T&amp;W fail to provide an explanation of how MMT generates full employment with price stability; lack a credible theory of inflation; and fail to justify the claim that the natural rate of interest is zero. MMT currently has appeal because it is a policy polemic for depressed times. That makes for good politics but, unfortunately, MMT\u2019s policy claims are based on unsubstantiated economics (The full paper is <a href=\"http:\/\/www.thomaspalley.com\/docs\/articles\/macro_theory\/mmt_response_to_wray.pdf\" target=\"_blank\" rel=\"nofollow\">HERE<\/a>).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Eric Tymoigne and Randall Wray\u2019s (T&amp;W, 2013) defense of MMT leaves the MMT emperor even more naked than before (excuse the Yogi Berra-ism). The criticism of MMT is not that it has produced nothing new. The criticism is that MMT is a mix of old and new, the old is correct and well understood, while [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,7],"tags":[],"class_list":["post-393","post","type-post","status-publish","format-standard","hentry","category-economics","category-political-economy"],"_links":{"self":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/393","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=393"}],"version-history":[{"count":8,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/393\/revisions"}],"predecessor-version":[{"id":1571,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=\/wp\/v2\/posts\/393\/revisions\/1571"}],"wp:attachment":[{"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=393"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=393"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thomaspalley.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=393"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}