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Sunday, June 7, 2020

MMT And The Coming Expansion

With the formatting of Recessions: Volume I finally under control, I am now turning to the layout of my next book. As I have discussed before, I will write at least one report in between Volume I and Volume II. With the Mitchell/Wray/Watts textbook published, I feel I am in a better position to write an explicit MMT primer. (Understanding Government Finance is the closest I have to a MMT primer, but it has a narrower scope.)

I had some concerns with my original plan for that primer, as I felt it might spiral out of control in terms of length. I think I have found a solution -- to limit my coverage of the breadth of MMT, and focus on the fiscal bits that attract the most attention. Rather than call it an MMT primer, it would be instead about the recovery from The Pandemic of 2020, and discuss the parts of MMT that are most relevant to it. (Unfortunately, this still leaves me without the comprehensive MMT primer that I should have written years ago...)

The aim is that the book will be of interest to people who want to know more about MMT, without getting dragged into long arguments about the shape of undergraduate economic curriculum, or what research mainstream economic journals should publish. If some miracle happened and lots of people read it, we might achieve herd immunity against stupid MMT takes (replacing them with stupid ideological arguments that at least get one or two statements about MMT correct).

One obvious issue with the writing is that we are still in the period of extreme turbulence in economic data, and there is a lot of uncertainty about the future path of the pandemic. My assumption is that once the initial bounce is over, we will be facing a long, drawn-out recovery with widespread underemployment (as has been the case in the post-1990 era). The book is aimed at why recoveries have been slow, and what could be done to speed them up.

It is entirely possible that I am too pessimistic, and policymakers will undertake policies that speed up the recovery. So long as the policies are similar to what I discuss, I will be able to market the book as "I told you so!," and so this will not be a waste of my writing time.

Length Concerns

I want to keep the length under control, which is probably what I wrote before every single other report I wrote. It is possible that I will stop publishing drafts of sections on here for some time, so that I can focus on the manuscript and keep closer tabs on its length. I have written some drafts that will make their way into the manuscript, but I will then focus on having the absolute minimum of bridging material.

This puts this report back closer to my original plan of writing shorter texts at a higher volume.

The problem I face with this strategy is paperbacks. I price my ebooks much cheaper than comparable fiction the big publishers, and so readers hopefully do not feel short-changed by some of my e-books being shorter than typical books. Frankly, many people are probably happier with a shorter reading time. (Recessions: Volume I is 200 pages, so it does not fall into that category.) However, print-on-demand paperbacks have a decent-sized fixed cost, and so I am somewhat concerned about the cost of a book that would likely run 80 pages. (A big publisher using offset printing would have less pricing issues with a thin book like that.) My existing readers who are satisfied with my output may not mind, but I do not want to create unhappy new customers who are expecting a full-length book based on the price of the paperback.

That said, I still have not finished the manuscript. It may once again bloat beyond my target length, and this may be a non-existent worry.

I have no idea how long publishing this will take. Based on previous trends, it would not be ready until the end of the year at the earliest. However, the pandemic has helped my writing productivity, so I might for once be able to speed up the turn-around.

(c) Brian Romanchuk 2020


  1. I too am watching the CV recovery progression.

    Where we might be different is that I am watching from a new perspective. The CV event has opened my eyes to the essential/non-essential divide in our economy. The essential sector never did shut down; hence, no serious recovery. It follows that, the prospective recovery will be in the remaining non-essential sector.

    I think this division of the economy has an economic lesson hidden in it. For the essential sector, money is a trading tool carrying meaningful essential information. For the non-essential sector, money is a tool measuring willingness to trade something essential for something non-essential.

    My intuition is that this observation feeds into the philosophy behind MMT. I can't yet assemble the package together coherently.

  2. There is a conventional term, Consumer Discretionary Spending, which makes a distinction between essential and optional consumer spending for goods and services. The Covid crisis has shifted the discretion away from markets and toward the public functions of any society generally known as "government".


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