Working Paper: NBER ID: w26650
Authors: N. Gregory Mankiw
Abstract: This essay discusses a new approach to macroeconomics called modern monetary theory (MMT). It identifies the key differences between MMT and the approach found in mainstream textbooks. It concludes that while MMT contains some kernels of truth, its most novel policy prescriptions do not follow cogently from its premises.
Keywords: No keywords provided
JEL Codes: E0; H6
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ability to issue currency (E42) | no default risk on debt (F34) |
| money creation (E51) | inflationary pressures (E31) |
| money supply (E51) | inflation (E31) |
| excessive money creation (E51) | increased aggregate demand (E00) |
| increased aggregate demand (E00) | pressure on inflation rates (E31) |
| income distribution struggles (D31) | inflationary outcomes (E31) |