William K. Black
March 13, 2019 Bloomington, MN
Third article in a series on MMT
I urge readers to review Scott Fullwiler’s brief paper on the theoretical and predictive successes of MMT scholars on a topic of enormous theoretical and practical importance. You do not need economics training to understand it. Fullwiler reports the results of two “natural experiments.” In this context, this means an unplanned experiment. The twin experiments were:
- What would happen if orthodox scholars tested the predictive strength of MMT?
- How would Paul Krugman react to an orthodox scholar’s demonstration of the predictive accuracy of key MMT insights – if Krugman did not know that the orthodox scholar’s work was verifying key MMT predictions?
Fullwiler’s paper answers both questions. The orthodox scholar, unknowingly, confirmed the predictive strength of many of MMT’s most important insights. Krugman praised De Grauwe’s findings as “seminal.” Krugman had no idea he was praising the predictive successes of MMT scholars because Krugman had never read MMT scholars’ work. Fullwiler’s paper shows that a series of MMT scholars made De Grauwe’s point more than a decade before De Grauwe published his “seminal” contribution in an orthodox journal. Stephanie Kelton was one of the MMT scholars who demonstrated precedence, making Krugman’s use of the word “seminal” as a descriptor even more unintentionally humorous.