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61: Modern Monetary Theory: Are deficit hawks an endangered species?
Where have all the deficit hawks gone? With mainstream politicians no longer comparing government finances to household saving habits, it appears that a new wave of fiscal spending is on the horizon.
This is part of a growing debate around Modern Monetary Theory, also known as MMT or “a dangerous proposition” if you’re the ECB, about why spending should only be constrained by inflation, how unemployment exists by choice, and that fiscal policy should be the main tool to control economic cycles.
In a world where central banks have become persistently more dovish as inflation targets are…
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