Yetsenga said the ideas in MMT raised some important questions about the current global system.
“If MMT comes with an inflation risk, conventional monetary policy frameworks seem to me to come with a deflation risk,” he said.
“In other words, the conventional monetary framework many countries use has its own problems. We need to work harder at assessing the balance between the two, rather than presuming the current system is problem free, and comparing MMT with perfection.”
Dr Hail called out Australia and the US as countries which explicitly fit the MMT framework.
“Our argument with the mainstream narrative is that - without going way back into history of economic thought - it's always ignored how monetary systems work,” he said.
“You only have to pick up an introductory economics textbook to see that it doesn't start with money, banking and balance sheets… instead, you get a chapter on money in banking somewhere towards the end.”
Dr Hail said MMT describes an alternate view on how the global monetary system actually works.
“Modern monetary theory - and nobody has really convincingly come up with an argument against this part of it, the descriptive part of modern monetary theory - seeks to describe the nitty gritty of how reserve accounting works,” he said.
“[It’s about] how the economy can be seen as a set of balance sheets evolving over time, always potentially evolving in ways which could lead to growing financial fragility and instability.”
Listen to a podcast of the call above to find out more.
Shane White is content manager at ANZ Institutional