A call for a new model to derive economic polices. Modern Monetary Theory (MMT) is a practical-based model that looks after the welfare of a nation's citizens.
figure out how the economy works by looking at what it is doing – in practice? But who knows how it works in practice? Not orthodox neo-liberal economists. Perhaps ask people with experience in trying to manage it – or experience of trying to make money from it? People like Mark Carney who ran the Bank of England (BoE); he has an inkling of how it works, and former hedge fund manager, academic and economist Warren Mosler; also has an inkling of how it works. It was Warren’s experience that led him to bring together the ideas that became – a new model to derive policies from – a model called Modern Monetary Theory (MMT).
I’m not able to say that MMT accurately describes how the economy works or that it is the right way to think about the economy; but what I can say is that it tries to understand the real economy – not a theoretical one. And importantly, it is based on a different set of assumptions about what economic policies are for. They are not for controlling arbitrary figures related to interest rates, deficits, or debts. They are about looking after the welfare of a nation’s citizens. Whether I am right or wrong – that’s an aim I find attractive for an independent Scotland.