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Looking Back at How I was Looking Ahead
Back in February 2021, I sat down with Ron Biscardi, the CEO of iConnections to talk MMT, the incoming Biden administration’s policies, capacity constraints, the problem with relying on interest rates to fight inflation, and more. I don’t think many people have seen it, so I thought I’d post it here.
A couple of months later, I wrote a longer piece about inflation risk and how policymakers could manage inflationary pressures in ways that don’t involve raising interest rates.
I got some pushback from a number of economists at the time. In their view, I had overlooked the simplest and most obvious way to deal with any inflation problem that might arise. “[Any] inflation threat from overheating can be contained by monetary policy,” said Paul Krugman, who poked fun at “MMTers [who] don’t believe in monetary policy.” But in recent days, Krugman has decided that rate hikes might not be the right tool after all.