What is the connection between the job guarantee and the Modern Money approach (MMT)?
While job guarantee proposals predate the Modern Money approach, the latter has stressed an important structural link between money and paid work in a money-using economy. MMT has made the case that full employment and price stability are not policy trade-offs but can be accomplished simultaneously by governments with the very same powers they use to administer the monetary system (Tcherneva 2022). MMT also analyzes the technical and institutional factors that underpin the spectrum of monetary sovereignty, which enable or constrain the capacity of the state to execute stabilization policy. This line of research suggests that a more disciplined fiscal approach to achieve landmark public policy objectives such as true full employment, based on automatic stabilizers is possible.
Tchrneva, Pavlina R. (2022). “The Job Guarantee: MMT’s Proposal for Full Employment and Price Stability“. Economic Democracy Initiative, Working Paper Series, No. 2.
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