Modern Monetary theory(MMT for short) is a relatively new economic school of thought. It was developed by Prof. L Randall Wray, Warren Mosler, and Prof. William Mitchel. They have been privately working on it for 20 years, but only went public about 10 years ago. MMT is a paradigm shifting theory that changes the nature of economic management and policy recommendations.
Right now, Wray is running a Q&A MMT Primer on his site, New Economic Perspectives.
Each Monday we will post a relatively short piece, gradually building toward a comprehensive theory of the way that money “works” in sovereign countries. We will then collect comments through Wednesday night, and will post a response to the comments on Thursday. The comments should be directly related to that week’s blog. Since we are trying to develop an understanding of MMT, we especially encourage commentators to let us know where we have been unclear. Since we will be presenting the Primer over the course of the coming year, we will sometimes have to beg for patience—obviously we cannot present the entire theory all at once.
These blogs begin with the basics; no previous knowledge of MMT—or even of economics—is required. The blogs are sequential; each subsequent blog builds on previous blogs. The blogs will be at the level of theory, with only limited reference to specific cases, histories, and policies. That is intentional. A Primer should provide a general overview that can be adapted to specific national situations. The regular pages of NEP will continue to discuss current real world policy issues. The Primer will remain on a different plane.
The Primer is already two weeks in. I highly suggest everyone check it out. Even if you don't agree(or think you don't agree) with the tenets of Modern Monetary Theory I think you will appreciate the opportunity to ask relevant, clarifying questions.
MMT is going to be around for a long time and will be a permanent stay in the economic world. The internet and Wray have afforded us an unique opportunity here. Imagine you were able to ask real time questions of Ludwig von Mises, John Maynard Keynes, or Milton Friedman as they founded their new schools of economic thoughts. You might not agree with them, but you'll certainly appreciate the chance to hear directly from them.
Go check out the primer, you won't regret it. This week is about debt and macro accounting.