Contrasting modern monetary theory and its critics

Abstract

The 2008 financial crisis and the 2020 COVID pandemic have made MMT relevant in public discourse. Neoclassical economists and heterodox economists including post-Keynesians have critiqued MMT. Yet, neither standard macroeconomics textbooks nor the CORE alternative address MMT expressly. The objective in this paper is to take a pluralist and critical look at MMT pertaining to various topics like fiscal policy, exchange rates, and inflation. This is achieved by delineating the main ideas of MMT through synoptic book reviews and identifying the conceptual MMT debate within heterodox journals. The paper provides a table to contrast the salient ideas of MMT and its critics. It is hoped that this comparative approach would facilitate instructors in contrasting the main ideas of MMT and its critics.