Ep 286 - Modern Monetary Theory and the European Project with Dirk Ehnts
Steve’s guest this week is Dirk Ehnts, a lecturer and author
who specializes in modern monetary theory (MMT). They discuss Dirk's new book,
"A Simple Guide to the Monetary System," which aims to simplify the
often complex concepts of MMT.
They discuss the significance of the Copernican turn to MMT,
which refers to the shift in perspective that occurred during the COVID-19
pandemic. Dirk explains that the massive increase in government spending and
the lack of inflationary effects challenged conventional economic theories that
had previously dismissed MMT.
Dirk explains the theory behind inflation targeting and how
it has failed to deliver on its promises of price stability and full
employment. He also highlights the role of trade policy and income inequality
in shaping economic outcomes, pointing out that these factors are often
overlooked in favor of focusing solely on interest rates and inflation.
The conversation shifts to the rise of the BRICS
countries (Brazil, Russia, India, China, and South Africa) and the geopolitical
battles that have influenced international trade. They discuss the idea of
losing faith in the US dollar as the primary world reserve currency and the
potential impact on global trade.
Dirk emphasizes that the public needs to understand how
money and resources interact in order to find solutions to problems like
climate change. He believes that as more people become aware of MMT and its
potential policies, there will be a demand for change.
Dirk Ehnts is a German heterodox economist.
He is one of the leading proponents of Modern Monetary Theory in Europe. Ehnts
is a member of the standing field committee History of Economic Thought of the
German economists association. Every summer since 2016 Ehnts has held a course
on MMT at the Summer School of Maastricht University. In February 2019, he
organized the 1st European MMT Conference. He is also a lecturer at the MMT
summer school at the University of Poznan in Poland.
