I have been a bit slow in posting about this subject. As many people probably already know, there has been something of an epic debate between Paul Krugman and Steve Keen, on a number of issues, but, above all, the subject of endogenous money.
One annoying thing I find: Steve Keen is a Post Keynesian, influenced by Hyman Minsky’s financial instability hypothesis. Steve Keen is not, strictly speaking, an MMT macro-economist, though it is true that there is a great deal of overlap between Post Keynesianism and MMT (for the emergence of MMT from Post Keynesianism, see here). Nor is endogenous money theory an invention of MMT: it goes right back to the 19th-century Banking school (Wray 1998: 32–33), was held by Wicksell and Schumpeter, entered Post Keynesian economics as early as the work of Joan Robinson and Nicholas Kaldor (although the classic text is the later work of Moore 1988), and is of course supported by MMT too. There is no doubt that a number of the old American Institutionalists (like John Kenneth Galbraith) supported endogenous money theory as well, as do many other modern heterodox economists (e.g., James Galbraith). (As a matter of historical interest, the great Post Keynesian economist Nicholas Kaldor used endogenous money theory to smash the monetarism of Milton Friedman and its vulgar supporters.)
A review of the debate in this video on RT, with an interview with Steve Keen. Some silly stuff at the beginning, but one can skip through this and start at 1.59.
For those interested in following the actual debate, see these links:
Steve Keen, “Instability in Financial Markets: Sources and Remedies,” INET Conference Paper, April 12-14, 2012.
Paul Krugman, “Minsky and Methodology,” 27 March, 2012.
Krugman’s comments on Keen’s paper.
Paul Krugman, “Banking Mysticism,” 27 March, 2012.
Krugman’s second comment on Keen’s paper and banking.
Steve Keen, “Krugman on (or maybe off) Keen,” Steve Keen’s Debt Deflation, 29 March, 2012.
Keen’s first response.
Nick Rowe, “The Supply of Money is Demand-Determined,” 1 April, 2012.
Scott Fullwiler, “Krugman’s Flashing Neon Sign,” 2 April, 2012.
Paul Krugman, “Things I Should Not Be Wasting Time On,” 2 April, 2012.
Paul Krugman, “A Teachable Money Moment,” 2 April, 2012.
Steve Keen, “Ptolemaic Economics in the Age of Einstein,” 2 April, 2012.
Keen’s second response.
Paul Krugman, “Oh My, Steve Keen Edition,” 2 April, 2012
Steve Keen, “Oh My, Paul Krugman,” 3 April, 2012.
Keen’s third response.
John Carney, “Paul Krugman vs. MMT: The Great Debate,” NetNet, 3 April, 2012.
“The Keen/Krugman Debate: A Summary,” Unlearning Economics, 3 April, 2012.
An excellent review of the debate from Unlearningeconomics. Very useful.
Dan Kervick, “Bring Back Fiscal Policy,” April 4, 2012.
“Not so Keen on Krugman,” Naked Keynesianism, April 4, 2012.
BIBLIOGRAPHY
Moore, B. J. 1988. Horizontalists and Verticalists: The Macroeconomics of Credit Money, Cambridge University Press, Cambridge and New York.
Wray, L. R., 1998, Understanding Modern Money: The Key to Full Employment and Price Stability, Edward Elgar, Cheltenham.
