Martin Wolf: States Create Useful Money, but Abuse It: "W...

Martin Wolf: States Create Useful Money, but Abuse It: "What then are the problems with MMT?... Suppose holders of money fear that the government is prepared to spend on its high priority items, regardless of how overheated the economy might become... fear that the central bank has also become entirely subject to the government���s whims.... They are then likely to dump money.... The focus of MMT���s proponents on balance sheets and indifference to expectations that drive behaviour are huge errors.... If politicians think they do not need to worry about the possibility of default, only about inflation, their tendency may be to assume output can be driven far higher, and unemployment far lower, than is possible without triggering an upsurge in inflation...

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