The trade-off between inflation and unemployment in an ‘MMT world’: an open-economy perspective

Carnevali, Emilio and Deleidi, Matteo (2023) The trade-off between inflation and unemployment in an ‘MMT world’: an open-economy perspective. European Journal of Economics and Economic Policies: Intervention, 20 (1). pp. 90-124. ISSN 2052-7764

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This paper is focused on modern monetary theory’s (MMT) treatment of inflation from an open-economy perspective. It analyses 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 MMT-ers that measures such as the job guarantee programme can achieve full employment without facing an inflation–unemployment trade-off.

Item Type: Article
Uncontrolled Keywords: Central Banking, Post-Keynesian, Open Economy Model
Subjects: L100 Economics
Department: Faculties > Business and Law > Newcastle Business School
Related URLs:
Depositing User: John Coen
Date Deposited: 20 Sep 2022 09:51
Last Modified: 29 Jun 2023 12:45

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