MMT Follow-up: A Framework for Money, Inflation, and Debt

Tags: The Fed, Financial Markets, Monetary Policy

08/14/2020 Robert P. Murphy

As a follow-up to his discussion on MMT with Rohan Grey (in ep. 130), Bob goes solo to explain the basic cash balance framework for thinking about money, inflation, and debt. Specifically, Bob will explain why he thinks it’s far more important to know how the government finances a deficit rather than knowing what it spends the money on.

Mentioned in the Episode and Other Links of Interest:

BMS ep. 130 with Rohan Grey.
Bob’s infamous inflation bet: response to Krugman/DeLong and his explanation years later for reason.com.
Rothbard’s critique of the “equation of exchange,” MV=PQ.
Bob’s QJAE article on the economics of fractional reserve banking.

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