MMT in the colonial period often led to periods of ruinous inflation and, less well-understood, revolution-inducing deflation.
What does the Austrian theory of the trade cycle have to do with Gordon Ramsay? Plenty.
We rely on competitive markets to supply us with “correct” quantities of goods and services ranging in importance from chewing gum to industrial chemicals, and from pedicures to petroleum. So why do we not rely on competitive markets to supply us with the “correct” quantity of money?
The Federal Reserve has created so much base money that it has found itself between the devil and the deep sea: choosing whether to let the money circulate in the economy, thereby pushing up prices, or to remove this money quickly, thereby potentially creating a deflationary spiral.
Money is not just what the government says it is. The market has been struggling to create alternatives for a very long time.
Would a self-governing society ever choose to delegate the broad monetary, financial, and regulatory powers now enjoyed by central banks?
The consequences of proposed exit strategies deserve serious attention. Schnabl’s work is a step in the right direction.