Quote Originally Posted by Montmorency View Post
To be scrupulous, in my post above I had big sovereign currencies especially in mind, polities the likes of the US, UK, Euro-zone, Japan, China... For all I know a country like Kazakhstan still has more practical constraints from conventional wisdom on its monetary policy.

All the more reason for the rich countries to prime the global economy by blowing some - digital - bills (including currency swaps).



Fun fact (though to be scrupulous again I'm not verifying it right now): US inflation during WW2, when the majority of GDP was government spending, was lower than in the years immediately after the war.

You're going to like this article, ACIN, on the intersection of the coronavirus relief/stimulus and Modern Monetary Theory.

https://www.nytimes.com/2020/04/15/b...lus-money.html



Note re: the $2 trillion figure that the Federal Reserve is technically injecting trillions more than the $450 billion allocated to it in the latest relief bill last month, with a commitment to unlimited quantitative easing, so the numbers in the legislation were there for some obscure technical reasons that I don't understand. But the point is, we have like 20% unemployment and near-unlimited money.

For the Brits: Bank of England to directly finance UK government’s extra spending
Problem with MMT is economists don't have a good framework on why we did not see inflation from the 2008 stimulus and QE. There is no guarantee the conditions today are the same and we could be walking into massive inflation in the near future.
MMT says, "it's no problem, keep printing money" but this key premise is neither agreed upon nor does it have a wealth of evidence to back it up.

As a discipline, MMT is still viewed skeptically. Current practices are based on fear and image, not any belief in MMT principles.