McKibbin sees double in MMT spray

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From the good professor today at the AFR:

Proponents of an old idea in new clothes – modern monetary theory (MMT) – argue that central banks can solve all these problems by simply buying the large amounts of government debt and increasing the money supply…This can only be described as a classic free lunch.

…The basic problem with MMT is it has been tested by countries and the result has always been hyperinflation, massive social and economic destruction and a crisis followed by more conventional economic policies being imposed. All existing experience – Venezuela today, Zimbabwe in 2008; Yugoslavia in 1994; Hungary in 1946; Greece in 1944; Wiemar Germany in 1923 – demonstrate the large costs.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.