On price stability with a job guarantee
Department
Economics, Finance and Quantitative Analysis
Document Type
Article
Publication Date
1-1-2022
Abstract
Modern Money Theory (MMT) has risen to prominence in popular policy debates within macroeconomics. MMT economists argue for creating a job guarantee program, which they argue would generate price stability. Using a benchmark model of time consistency supplemented with a job guarantee, we conclude that once policymakers' incentives are considered, the job guarantee does nothing to help stabilize prices. We compare this program to a competing proposal to maintain price stability and full employment, NGDP targeting.
Journal Title
Contemporary Economic Policy
Journal ISSN
10743529
Digital Object Identifier (DOI)
10.1111/coep.12573
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