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

Emilio Carnevali and Matteo Deleidi

European Journal of Economics and Economic Policies: Intervention, 2023, vol. 20, issue 1, 90-124

Abstract: 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.

Keywords: central banking; post-Keynesian; open-economy model (search for similar items in EconPapers)
JEL-codes: E12 E51 F41 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.elgaronline.com/view/journals/ejeep/20/1/article-p90.xml (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:ejeepi:v:20:y:2023:i:1:90-124

Access Statistics for this article

European Journal of Economics and Economic Policies: Intervention is currently edited by Torsten Niechoj

More articles in European Journal of Economics and Economic Policies: Intervention from Edward Elgar Publishing
Bibliographic data for series maintained by Phillip Thompson (phillip.thompson@e-elgar.co.uk).