1/09/2020

On Modern Monetary Theory

"In any Ponzi scheme, the fact that it has not yet collapsed is by no means a guarantee that it will never collapse. In fact, the longer that a Ponzi scheme can be sustained, the more catastrophic will be its collapse.


My guess is that Mankiw had to reach to find this economic interpretation of MMT. I am reminded of Paul Samuelson claiming that the only way most economists could reproduce classical and neoclassical monetary theory was to think “If I were a jackass, where would I go?”

I predict that no devotee of MMT will agree that Mankiw’s interpretation is the correct one. I fear that MMT is deeply irrefutable, because there will be no agreement about what it means."