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MMT requires excess reserves to be absorbed by taxation. Taxation has not be increased since the beginning of the quantitative easing interventions. MMT has nev
by satellite2 5y ago
MMT requires excess reserves to be absorbed by taxation. Taxation has not be increased since the beginning of the quantitative easing interventions. MMT has never been tested.
- amrocha 5y agoMMT isn't something you test, it's a framework for explaining what happens in economies. Regardless of what policy decisions are made, MMT has been very accurate at predicting market reactions.
- AnimalMuppet 5y agoMMT isn't just an explanation. It's also predictions - if the Fed and the Treasury do X, the result will be Y. And even recommendations: if the circumstances are A, the correct policy response is B. Those things can be tested - and haven't been. So far, nobody has taken the policy recommendations where they differ from mainstream econ, and (to my knowledge) we haven't been in places where MMT's predictions differ from mainstream econ's.
- amrocha 5y agoMMT does not make policy recommendations. Maybe the people behind it make recommendations based on the predictive power of MMT. MMT has been WAY better than mainstream economics at predicting market movements, most easily seen in Japan.