Friday , July 30 2021
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Tag Archives: thinking like an economist

The Persistence of Demand

Here’s the very short version of this very long post: Hysteresis means that a change in GDP today has effects on GDP many years in the future. In principle, this could be because it affects either future aggregate demand or potential output. These two cases aren’t distinguished clearly in the literature, but they have very different implications. The fact that the Great Recession was followed by a period of low inflation, slow wage growth and low interest rates, rather than the...

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New Piece on MMT

Arjun Jayadev and I have a new piece up at the Institute for New Economic Thinking, trying to clarify the relationship between Modern Monetary Theory (MMT) and textbook macroeconomics. (There is also a pdf version here, which I think is a bit more readable.) I will have a blogpost summarizing the argument later today or tomorrow, but in the meantime here is the abstract: An increasingly visible school of heterodox macroeconomics, Modern Monetary Theory (MMT), makes the case for functional...

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