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Nick Rowe begins the walk to MMT

April 25, 2011

Nick Rowe is a smart guy – I knew he would come around.   He gets about 60% of the way there with this post.  He gets it about the limits of spending money – there are no limits but inflation.

He still makes a fundamental error.  He needs to update his ideas about government debt.  Nick – take a look why QE is like issuing treasury bills from Randal Wray or the original from Warren Mosler.

Categories: Main
  1. Clonal Antibody
    April 27, 2011 at 3:36 pm

    Brad DeLong’s mea culpa

    I must say that I, back in 2007, would not have believed that the world would turn out to be as fundamentalist-Keynesian as it has turned out to be. I would have said that there are full-employment equilibrium-restoring forces in the labor market which we will see operating in a year or two to push the employment-to-population ratio back up. I would have said that the long-run funding dilemmas of the social insurance states would greatly restrict the amount of expansionary fiscal policy that could be run before crowding-out became a real issue.

    I would have been wrong.

    • TC
      April 27, 2011 at 4:12 pm

      I know, Delong is smart. He is able to change his mind. He is a former Summers/Rubin guy too. Rubin sounds especially impressive to me in his personal interactions, even if his ideas were wrong headed.

      I cannot blame these guys any more than I blame Thomas Jefferson for owning slaves. But that doesn’t make me fight them any less hard, just as it wouldn’t have made me join the Union any less quickly.

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