Recent Posts

Wednesday, May 31, 2023

CEA MMT Panel Post-Mortem

I participated in a “Yay/boo for MMT!” debate Zoom panel for the annual Canadian Economist Association conference. I do not think I said anything outrageously stupid or got anyone raging mad at me, so I beat my expectations going into it.

(I do not know if these panels will be publicly available after the end of the conference.)

The “con” side of the panel mainly focussed on a question: “Does MMT add new policy tools?” Since we did not go too far in discussing the Job Guarantee (or things like incomes policy, this was not really great for MMT — since we are stuck with two high level policy levers — fiscal and monetary policy. Obviously, having both fiscal and monetary policy creates more freedom of action than just fiscal policy (if we take the hard line anti-monetary policy stance of some MMT proponents).

The only way to profitably take on that line of argument in a hypothetical repeat of this debate is to have somewhat detailed plans on how to reform fiscal policymaking in Canada. However, that is not just a “generic MMT” topic, it is a topic in Canadian institutional framework analysis — which I am not the person to ask about.

I tried to steer the discussion towards theory, but the other side of the panel was not interested — they are mainly interested in policy analysis.

One take away is that the discussion confirmed my belief that “downgrading monetary policy” is going to be an extremely hard political fight. One would need to convince a lot of people that monetary policy is ineffective — and that is a very thorny analytical problem. (Why is it thorny? Neoclassical beliefs about interest rate policy appear to be non-falsifiable. Good luck with falsifying a non-falsifiable belief!)

What I would offer as a generic lesson for this exercise is that discussing “MMT” as a concept is a dead end, one needs to focus on particular concrete topics of interest, and see whether MMT is offering useful insights into that topic.

Email subscription: Go to 

(c) Brian Romanchuk 2023

No comments:

Post a Comment

Note: Posts are manually moderated, with a varying delay. Some disappear.

The comment section here is largely dead. My Substack or Twitter are better places to have a conversation.

Given that this is largely a backup way to reach me, I am going to reject posts that annoy me. Please post lengthy essays elsewhere.