Sunday, March 10, 2019
Big MMT Textbook Incoming
The text Macroeconomics by William Mitchell, L. Randall Wray, and Martin Watts is now available as a pre-order for the paperback edition (the ebook edition may already be available; I have not had time to validate). As anyone who has been paying any attention for the past few weeks, Modern Monetary Theory (MMT) has been the subject of controversy. Although I am certainly biased, roughly 99% of the recent high profile attacks are just attacking straw men; one needs to actually read some of the actual theory to critique it. Although there are tons of free primers and so forth on the internet, for many people, their time is worth more than the cost of the textbook. It is my understanding that this textbook will be advanced enough to cover the topics that are beyond the internet primers, and it will provide references to the literature if one wants to purse the primary literature.
I will write a text that may be labelled a "review," but it will really only be an initial overview of the parameters of the book: what is discussed, reading level, etc. Since I am no longer an inmate of an academic institution, I am not really concerned about what is the primary intended use of this book: as a textbook for undergraduates/graduates. Rather, my intended audience is someone like myself: we did our time in academia, learned how to learn, and then want to know what to learn. My real "review" for this book will show up in later articles: am I citing passages from the text, using references, etc.? I will not be able to give an honest answer to that question for at least a year.
For a competent fixed income practitioner, the material that catches attention in internet primers is interesting, but ultimately not too controversial from a theoretical point of view. Only the dumbkopfs expected Japan to melt down because the debt-to-GDP ratio was "unsustainable." (The primers offered a clean story -- which is extremely useful -- but the punchline itself was not a surprise; we practitioners had to get an intuitive feel based on experience.) The interesting bits -- like views on inflation formation -- were quite often outside those primers. From what I have seen of the textbook, it is hitting those areas of interest.
Even when I was in academia, I argued that the best way to get a handle on a field is to first get a textbook, monograph, or possibly a doctoral thesis. Although the primary literature is in the form of articles, one cannot tell the forest from the trees if one does not know what a forest is. If one already has a grasp of economics, it would probably not be necessary to read the textbook from cover-to-cover. However, one can go into the relevant chapters, get the background, and then use the provided citations to get a handle on what you are looking at in the academic journals.
Since I do not think that I will write a traditional review, I did not attempt to get a review copy. So I will only start writing about the book once I get my dirty paws on it.
MMT "Macroeconomics" text on Amazon (affiliate link).
(c) Brian Romanchuk 2019