The true dangers of modern monetary theory

What happens when inflation risk increases?

Some policymakers are clutching at a dangerous new idea as they look for ways to address the possibility of a further downturn.

It is called modern monetary theory - and its advocates believe that when central banks print money and hand it over to governments to spend, reserves in the banking system rise, and this ultimately puts downward pressure on interest rates. The Kiwi question: Have central banks learned nothing since 2008? The biggest proponent of the idea has been Stephanie Kelton, economic adviser to Bernie Sanders during his 2016 Presidential campaign. She has now been joined by other US Democratic Party thinkers as they seek to fund the expensive signature policies being proposed by the Democratic ...