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Business Cycles, Inflation and Unemployment: An MMT perspective

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  • M S, Navaneeth

Abstract

Any modern economy faces the periodic tendency of fluctuations that disrupts the macroeconomic variables leading to massive downturns in economic activity- conceptualized as business cycles. This review article examines the countercyclical policies adopted by Central Banks during recessions in light of the various arguments laid out by Modern Monetary Theory (MMT). Finally, it also looks into the assumptions behind Phillips' curve and what MMT has to offer in terms of inflation targeting

Suggested Citation

  • M S, Navaneeth, 2021. "Business Cycles, Inflation and Unemployment: An MMT perspective," MPRA Paper 115352, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115352
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    File URL: https://mpra.ub.uni-muenchen.de/115352/1/MPRA_paper_115352.pdf
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    References listed on IDEAS

    as
    1. Laurence Ball & N. Gregory Mankiw, 2002. "The NAIRU in Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 16(4), pages 115-136, Fall.
    2. William F. Mitchell, 1998. "The Buffer Stock Employment Model and the NAIRU: The Path to Full Employment," Journal of Economic Issues, Taylor & Francis Journals, vol. 32(2), pages 547-555, June.
    3. Stock, James H. & Watson, Mark W., 1999. "Business cycle fluctuations in us macroeconomic time series," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 1, pages 3-64, Elsevier.
    4. Claudio Borio & Mathias Drehmann & Dora Xia Author-X-Name_First: Dora, 2019. "Predicting recessions: financial cycle versus term spread," BIS Working Papers 818, Bank for International Settlements.
    5. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1, July.
    6. William Mitchell & Joan Muysken, 2008. "Full Employment Abandoned," Books, Edward Elgar Publishing, number 1188.
    7. William Mitchell, 2020. "The Job Guarantee and the Phillips Curve," Japanese Economy, Taylor & Francis Journals, vol. 46(4), pages 240-260, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    MMT; NAIRU; Phillip's Curve; Business Cycle;
    All these keywords.

    JEL classification:

    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General

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