Saturday, January 7, 2012

Rodger Mitchell — Preventing and Curing Inflation: Modern Monetary Theory vs. Monetary Sovereignty


Read it at Monetary Sovereignty
Preventing and Curing Inflation: Modern Monetary Theory vs. Monetary Sovereignty
by Rodger Mitchell

Rodger reports on an exchange with Warren Mosler, and a summary of Rodger's view. Definitely an addition to the inflation debate regarding the monetary v. fiscal approaches to inflation control.

10 comments:

wh10 said...

One thing I would like to see more of is theoretical and empirical analysis of the impacts of monetary policy from the MMTers. I understand they view it as going both ways at a high level, but a little deeper analysis would be nice. To me, the MMT position on monetary policy seems much more heterodox than their stance on fiscal.

Tom Hickey said...

@wh10

Randy Wray: "So we close with the normative aspect of institutionalism: money should be neutral. The Neoclassicals claim it already is, but that is pure nonsense. We can make money neutral by euthanizing the rentier, that is, by driving the interest rate to zero. And by moving immediately to full employment and stable prices through an employer of last resort program."
source

Warren Mosler said...

Roger has misrepresented my position probably because he doesn't fully understand it.

Warren mosler

rodney said...

Sometimes I can't help but think this is all an exercise in futility. The population is rising whilst resources are dwindling. Makes me think inflation is part of the natural order of things.

Tom Hickey said...

Thanks for setting the record straight, Warren.

Tom Hickey said...

@ Rodney

Not if technological innovation and productivity stay ahead of resource use and substitution effects. There is a big debate that been going on about this since the 70's.

Clonal said...

On the issue of technological innovation, see this article by Matias Vernengo at the University of Utah - Cold Fusion and Population - Environmental Musings

Quote:

The center of gravity on climate change/global warming/... on the left is pretty fairly represented by Dean Baker's recent blog saying it's lights out figuratively and literally if we don't change our profligate energy ways. And this is by far more important inter-generationally than the current aggregate-demand-deficit-led fiscal deficits. Dean's post is here.

And, given mainstream science, he's absolutely right. This leads to the growth-neutral advocates with whom I have a moral problem in that it condemns the poorer nations to less wealth than we living in advanced countries enjoy. If that is to be the outcome, we should be crystal clear sure of our environmental arguments. I do not challenge results like those from the IPCC.
.
.
.
.

wh10 said...

Is there a piece on Warren's website that lays out his position?

Ben said...

Not directly related to this post, but I found it interesting that Rodger Mitchell calls his thinking 'Monetary Sovereignty' as distinct from MMT. I had not come across this before. Is he unique in this, or do others also label themselves in this way?

Tom Hickey said...

MMT economists use "currency sovereignty" instead.