Wednesday, July 27, 2011

MMT'er says liquidity trap unimportant

Here's an MMT proponent claiming that the liquidity trap we are in now is unimportant.

Unimportant in that we should always just deficit spend to meet all our needs, or something like that.  So a liquidity trap is, by this interpretation of MMT, not required to justify this.

I'm inclined to think, as Krugman does, that MMT goes a bit too far.  But much bigger deficits are called for now because of liquidity trap, unemployment, and so on.

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