Re:What is the Eurodollar System? (2020) [pdf]
by epistasis on Sunday April 10, 2022 @02:19PM
(#30979997)
There are some really great insights for developing countries from MMT, but one could also argue they are good ideas anyway and perhaps not unique to MMT (a fuzzy critique that could be lobbed at most good advice). Fadhel Kaboub is the person I've heard speak on this the most, including with presentations to Ukraine, for example:
https://denison.edu/people/fadhel-kaboub
In general the advice is to 1) maintain economic sovereignty as much as possible by avoiding debt denominated in foreign currency (IMF is pretty evil in this regard), 2) focus on maintaining economic activity that builds the basic needs of society, like food production, etc.
At its heart MMT is a really simple concept and pretty undeniable, just pointing out that the emperor has no clothes when it comes to rhetoric and political whining about debt. Inflation is still a big risk when spending capacity overreaches production capacity (or, as recently, production capacity seems to shrink...).
I notice that MMT discussion (esp. on [1]) focus very tightly on sovereign currencies for their examples and spend a lot of time describing the impossibility of default, etc., for governments that make loans in their own currency.
This is, of course, correct.
But I continue to wonder: in a world of MMT - a world wherein we fully adopt MMT as our model and pursue it explicitly - what is to happen to the Argentinas and the Ukraines and the Malaysias, etc. ? That is always glossed over ... is it just assumed that they will be as ill-served as always by the world order ?
AFAICT the answer that MMT has for Argentina (for instance) is: You'll be as fucked as you've always been.
[1] https://www.nakedcapitalism.com/