Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238663 
Year of Publication: 
2020
Series/Report no.: 
Working Paper No. 973
Publisher: 
Levy Economics Institute of Bard College, Annandale-on-Hudson, NY
Abstract: 
This paper is focused on Modern Monetary Theory's (MMT) treatment of inflation from an open economy perspective. It analyzes how the inflation process is explained within the MMT framework and provides empirical evidence in support of this vision. However, it also makes use of a stock-flow consistent (open economy) model to underline some limits of the theory when it is applied in the context of a non-US (relatively) open economy with a flexible exchange rate regime. The model challenges the contention made by MMTers that measures such as the job guarantee program can achieve full employment without facing an inflation-unemployment trade-off.
Subjects: 
Central Banking
Post-Keynesian
Open Economy Model
Modern Money Theory
JEL: 
E51
E12
F41
Document Type: 
Working Paper

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