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The Deficit Myth Reviews

The Deficit Myth by Stephanie Kelton

The Deficit Myth

Modern Monetary Theory and How to Build a Better Economy

Stephanie Kelton

Score pending

2 reviews

Imprint: John Murray Publishers Ltd
Publisher: John Murray Press
Publication date: 9 Jun 2020
ISBN: 9781529352528

'Game-changing ... Read it!' - Mariana Mazzucato The leading thinker and most visible public advocate of modern monetary theory - the freshest and most important idea about economics in decades - delivers a radically different, bold, new understanding for how to build a just and prosperous society.

2 stars out of 5
10 Jul 2020

"A leading light of modern monetary theory illuminates the debate"

What MMT appears to offer that conventional policymaking does not is the job guarantee. On one level this is attractive — central banks consistently overestimate how low unemployment rates can fall before inflation reappears. The guarantee would remove this discretion and use the composition of employment, not its level, to control inflation. Yet there is no certainty that it would create the “good jobs” Kelton imagines. It may end up looking more similar to workfare programmes. In a time of stagflation, with inflation and unemployment rising, it may become as unpleasant a tool for trying to force down private sector wage growth as conventional monetary policy. The descriptive part of MMT is more appealing: that monetary sovereigns really are currency issuers not users. That insight, however, is neither new nor particularly helpful as we work out how best to balance growth, inflation and fiscal sustainability on the other side of coronavirus.

Reviews

3 stars out of 5
18 Jun 2020

"Modern monetary theory is an interesting alternative lens to better understand the constraints facing central banks"

Kelton is a razor-sharp writer, making accessible to noneconomists what can be technically challenging material in other hands. Smashing shibboleths of conventional economic wisdom, the author is unafraid to point out that the emperor has no clothes. She argues passionately for a more progressive economy, starting by flipping the script on how we conceive public finances and monetary policy. While written as polemic, The Deficit Myth is theoretically sound, though occasionally politically naive.