April 22, 2019

The “Progressive Wing” of the Democratic party is making the case that Modern Monetary Theory, MMT, could provide the financing mechanism for their most ambitious programs such as Medicare For All, the Green New Deal, Guaranteed Employment at a living wage and so forth. Issues that are likely to be at the forefront of the political and economic debates leading to the 2020 election. Given the prospective importance of MMT as a financing mechanism for these ambitious programs, it is easy to understand why MMT has risen to the forefront of the economic policy world. The academic foundations of MMT can be traced to It what follows we review some of the key features of MMT as reported in the press as well as the key assumptions, explicit and or implicit, that lead to the MMT policy recommendations. Such an approach provides two different ways to evaluate MMT. One is in terms of the quality of the assumptions made and the other being whether the policy recommendation and expected results conform to the data or empirical evidence.

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