The case of functional finance
Modern Monetary Theory suggest that governments should set their fiscal position at whatever level is consistent with price stability and full employment, regardless of current debt or deficits.
In our view, it is a mistake for those on the mainstream side of the debate to dismiss MMT supporters as radicals or holders of outré beliefs. They should recognize that MMT is making unconventional policy arguments in a framework of conventional economic analysis. Moreover, the experience of the last decade during which higher levels of debt did not lead to runaway inflation or other obvious costs, and during which conventional monetary policy failed to quickly and reliably close output gaps, should make policy-oriented macroeconomists open to revising their views on the merits of the conventional instrument assignment.
Mainstream Macroeconomics and Modern Monetary Theory: What Really Divides Them?
By: Arjun Jayadev, J. W. Mason – Institute for New Economic Thinking
How MMT came to be
A brief history on how modern monetary theory developed: from Minsky to permanent zero interest rate policy.
MODERN MONEY THEORY: How I came to MMT and what I include in MMT
By: L. Randall Wray – University of Missouri
The criticism
MMT is best understood as political polemic, aimed at beating back the budget deficit hawks. It does not add to economic theory, so talking of policy being made according to MMT does not make sense.
Modern Money Theory (MMT) vs. Structural Keynesianism
By: Thomas Palley – New America Foundation
