01:17:08

EssentialMike Green in Conversation

How MMT Explains the Price of Everything

Featuring Warren Mosler and Michael Green

Mar 10, 2022 • 77 minutes

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Essential

Mike Green in Conversation

How MMT Explains the Price of Everything

It all flows from a state-controlled monopoly on currency.

Featuring Warren Mosler and Michael Green

Mar 10, 2022 • 77 minutes

Warren Mosler is a former hedge fund manager turned academic economist who’s known as the father of Modern Monetary Theory. He’d like to remind us that “MMT is descriptive, not prescriptive." As he explains to Mike Green of Simplify Asset Management in part one of a two-part conversation, the key to understanding MMT is the sequence of state imposition of a coercive tax rate, state spending, and the payment of taxes and purchase of state securities. The basic effect is the state currency becomes a public monopoly. Because the economy needs the state’s currency, state spending determines terms of exchange. The bottom line is prices are a function of prices paid by the state when it spends. Mosler illustrates this general framework with reference to brief histories of fixed and floating exchange rate regimes. Of note, when it comes to labor, a “job guarantee” is a realistic policy choice in a state that uses a floating exchange rate. Mosler and Green also touch on policy choices that benefit exporters as well as mechanisms of real wealth creation. Read Mosler’s “Framework for the Analysis of the Price Level and Inflation” here: https://rvtv.io/363Qjwm. To explore more of his work visit www.moslereconomics.com. And be sure to tune in for part two of the interview tomorrow. Recorded on March 7, 2022. Show More

A Real Vision original, Mike Green engages in exciting conversations about the big macro topics that matter. Exploring personal passions -- including the US-China relationship that defines modern geopolitics as well as market structure and the question of how short-volume strategies and passive indexation have warped the way markets function -- Mike creates immeasurable value for investors. Never stuck on any one or two themes, he also explores breaking issues sure to shape our understanding of ever-changing financial markets.

More Episodes

A Real Vision original, Mike Green engages in exciting conversations about the big macro topics that matter. Exploring personal passions -- including the US-China relationship that defines modern geopolitics as well as market structure and the question of how short-volume strategies and passive indexation have warped the way markets function -- Mike creates immeasurable value for investors. Never stuck on any one or two themes, he also explores breaking issues sure to shape our understanding of ever-changing financial markets.

More Episodes

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