Monday, December 7, 2020

Rajan and Romanchuk

In How Much Debt is Too Much, Raghuram Rajan writes that

"The new conventional wisdom in these unconventional times is that advanced-economy governments can take advantage of today's ultra-low interest rates to borrow and spend without limit in order to support the economy. But the fact is that there is always a limit, and it may come into view sooner than many realize."

Brian Romanchuk responds, pointing out that Rajan Accuses MMT of Making Errors Made By Mainstream.

"As quite often happens when mainstream commentators critique MMT, no attempt was made to cite or quote MMT sources. In this case, that would have been useful -- since he accuses MMTers of making basic analytical errors. Unfortunately for his case, those errors are actually made by mainstream economists, and MMTers take the other side of debates."

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