- MMT Modern Monetary Theory Part.49
635 ：金持ち名無しさん、貧乏名無しさん (ﾜｯﾁｮｲ 6fc9-GbQ8)[sage]：2020/09/30(水) 19:41:33.09 ID:gygcCpMZ0 - Last Updated : Sep 02, 2020 10:35 AM IST | Source: Moneycontrol.com
What Modern Monetary Theory has to say about the US Fed’s change of strategy
https://www.moneycontrol.com/news/opinion/what-modern-monetary-theory-has-to-say-about-the-us-feds-change-of-strategy-5787431.html
Although the recent policy statement by Powell seems like a small victory for labour, MMTers have warned
that the Fed is likely to revert to its old ways after the economic crisis unleashed by the pandemic abates
While Powell identifies some reasons for the breakdown in the Phillips curve such as slowing population and
productivity growth, an aging population and global disinflationary pressures, he does not mention the wide
divergence between real wage growth and productivity growth that has taken place since the 1970s nor does
he discuss the weakening power and ability of workers to engage in collectively bargaining that has emerged
from neoliberal macroeconomic policies ? privatization, liberalization (deregulation) and globalization.
| - MMT Modern Monetary Theory Part.49
636 ：金持ち名無しさん、貧乏名無しさん (ﾜｯﾁｮｲ 6fc9-GbQ8)[sage]：2020/09/30(水) 19:41:46.03 ID:gygcCpMZ0 - >>635
For years now, the proponents of Modern Money Theory (MMT) have been pointing out the breakdown of the
Phillips curve. In fact, the political face of MMT, Rep. Alexandria Octavio-Cortez had questioned Powell at
a congressional hearing in July 2019 whether the Phillips curve had broken down. His answer was in the affirmative.
And this was much before the pandemic. The hearing then articulated a greater role for fiscal policy ?greater fiscal
space ? to address issues of long-term growth, stagnant real wages and unemployment.
Although the recent policy statement by Powell seems like a small victory for labour, MMTers have warned that the
Fed is likely to revert to its old ways after the economic crisis unleashed by the pandemic abates. As proposed by
the Australian economist William Mitchell more than twenty years ago, a longer-term solution to achieve full employment
with price stability is the implementation of a universal job guarantee (UJG) program wherein a buffer stock of
employment (not unemployment) is created to stabilize wages and thereby inflation. The UJG minimum wage rate
serves as nominal anchor for wage rates and the price level.
Sashi Sivramkrishna is an MMT researcher, economic historian and documentary filmmaker. Views are personal.
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