IDEAS home Printed from https://ideas.repec.org/a/aea/apandp/v110y2020p141-44.html
   My bibliography  Save this article

A Skeptic's Guide to Modern Monetary Theory

Author

Listed:
  • 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.

Suggested Citation

  • N. Gregory Mankiw, 2020. "A Skeptic's Guide to Modern Monetary Theory," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 141-144, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:141-44
    DOI: 10.1257/pandp.20201102
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/pandp.20201102
    Download Restriction: no
    File URL: https://www.aeaweb.org/doi/10.1257/pandp.20201102.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    File URL: https://libkey.io/10.1257/pandp.20201102?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. N. Gregory Mankiw, 1985. "Small Menu Costs and Large Business Cycles: A Macroeconomic Model of Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(2), pages 529-538.
    2. George A. Akerlof & Janet L. Yellen, 1985. "A Near-Rational Model of the Business Cycle, with Wage and Price Inertia," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(Supplemen), pages 823-838.
    3. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Françoise Drumetz & Christian Pfister, 2021. "The Meaning of MMT," Working papers 833, Banque de France.
    2. Nikolay Nenovsky, 2020. "The Theory of the Emission Economy Bolshevik roots of "Modern Monetary Theory"," Working Papers hal-04084551, HAL.
    3. Kocherlakota, Narayana R., 2022. "Stabilization with fiscal policy," Journal of Monetary Economics, Elsevier, vol. 131(C), pages 1-14.
    4. Arslan Razmi, 2023. "MMT and policy assignment in an open economy context: Simplicity is useful, oversimplification not so much," Metroeconomica, Wiley Blackwell, vol. 74(2), pages 328-350, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. George A. Akerlof, 2003. "Behavioral Macroeconomics and Macroeconomic Behavior," The American Economist, Sage Publications, vol. 47(1), pages 25-47, March.
    2. Slanicay Martin, 2014. "Some Notes on Historical, Theoretical, and Empirical Background of DSGE Models," Review of Economic Perspectives, Sciendo, vol. 14(2), pages 1-20, June.
    3. Chung‐Cheng Lin & Ching‐Chong Lai, 1998. "Efficiency Wages, Partial Wage Rigidity, and Money Nonneutrality," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 331-340, October.
    4. Gil Mehrez, 1996. "Output, Employment And Prices In An Economy With Adjustment Costs," Macroeconomics 9610003, University Library of Munich, Germany.
    5. Mankiw, N Gregory, 1990. "A Quick Refresher Course in Macroeconomics," Journal of Economic Literature, American Economic Association, vol. 28(4), pages 1645-1660, December.
    6. Rongrong Sun, 2014. "Nominal rigidity and some new evidence on the New Keynesian theory of the output-inflation tradeoff," International Economics and Economic Policy, Springer, vol. 11(4), pages 575-597, December.
    7. Levy, Daniel & Dutta, Shantanu & Bergen, Mark & Venable, Robert, 1998. "Price Adjustment at Multiproduct Retailers," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(2), pages 81-120.
    8. Michael C. Burda, 2001. "European Labour Markets and the Euro: How Much Flexibility Do We Really Need?," Palgrave Macmillan Books, in: Deutsche Bundesbank (ed.), The Monetary Transmission Process, chapter 7, pages 252-282, Palgrave Macmillan.
    9. Georgii Riabov & Aleh Tsyvinski, 2021. "Policy with stochastic hysteresis," Papers 2104.10225, arXiv.org.
    10. J.P.G. Reijnders, 2007. "Impulse or propagation? How the tides turned in Business Cycle Theory," Working Papers 07-07, Utrecht School of Economics.
    11. Laurence Ball, 1991. "The genesis of inflation and the costs of disinflation," Proceedings, Federal Reserve Bank of Cleveland, pages 439-461.
    12. Nakamura, Emi & Steinsson, Jón, 2011. "Price setting in forward-looking customer markets," Journal of Monetary Economics, Elsevier, vol. 58(3), pages 220-233.
    13. Pinelopi Koujianou Goldberg & Rebecca Hellerstein, 2006. "A Framework for Identifying the Sources of Local-Currency Price Stability with an Empirical Application," 2006 Meeting Papers 625, Society for Economic Dynamics.
    14. Antoine Kamiantako Miyamueni & Henry Ngongo Muganza, 2018. "Chocs technologiques, chocs des prix et fluctuations du ch\^omage en R\'epublique D\'emocratique du Congo," Papers 1804.09532, arXiv.org.
    15. Andersen, Torben M., 1995. "Adjustment costs and price and quantity adjustment," Economics Letters, Elsevier, vol. 47(3-4), pages 343-349, March.
    16. Silvia Fabiani & Martine Druant & Ignacio Hernando & Claudia Kwapil & Bettina Landau & Claire Loupias & Fernando Martins & Thomas Mathä & Roberto Sabbatini & Harald Stahl & Ad Stokman, 2006. "What Firms' Surveys Tell Us about Price-Setting Behavior in the Euro Area," International Journal of Central Banking, International Journal of Central Banking, vol. 2(3), September.
    17. Leif Danziger, 1999. "A Dynamic Economy with Costly Price Adjustments," American Economic Review, American Economic Association, vol. 89(4), pages 878-901, September.
    18. N. Gregory Mankiw & Ricardo Reis, 2002. "Sticky Information versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(4), pages 1295-1328.
    19. Mark Gertler & John Leahy, 2008. "A Phillips Curve with an Ss Foundation," Journal of Political Economy, University of Chicago Press, vol. 116(3), pages 533-572, June.
    20. Martha Misas A. & Enrique López E. & Juan Carlos Parra A., 2013. "La formación de precios en las empresas colombianas: evidencia a partir de una encuesta directa," Investigación Conjunta-Joint Research, in: Laura Inés D'Amato & Enrique López Enciso & María Teresa Ramírez Giraldo (ed.), Dinámica inflacionaria, persistencia y formación de precios y salarios, edition 1, chapter 11, pages 273-348, Centro de Estudios Monetarios Latinoamericanos, CEMLA.

    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:apandp:v:110:y:2020:p:141-44. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.