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A Skeptic's Guide to Modern Monetary Theory

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  • 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," NBER Working Papers 26650, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:26650
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    References listed on IDEAS

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    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. Yellen, Janet L, 1984. "Efficiency Wage Models of Unemployment," American Economic Review, American Economic Association, vol. 74(2), pages 200-205, May.
    3. 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.
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    Cited by:

    1. Nikolay Nenovsky, 2020. "The Theory of the Emission Economy Bolshevik roots of "Modern Monetary Theory"," Working Papers hal-04084551, HAL.
    2. Kocherlakota, Narayana R., 2022. "Stabilization with fiscal policy," Journal of Monetary Economics, Elsevier, vol. 131(C), pages 1-14.
    3. 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.
    4. Françoise Drumetz & Christian Pfister, 2021. "The Meaning of MMT," Working papers 833, Banque de France.

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    More about this item

    JEL classification:

    • E0 - Macroeconomics and Monetary Economics - - General
    • H6 - Public Economics - - National Budget, Deficit, and Debt

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