Is Modern Monetary Theory Still Relevant?

Modern monetary theory (MMT), which gained popularity in 2020, suggested that the deficit should not be a concern as long as government spending does not cause inflation. However, the rapid rise in inflation following Joe Biden's COVID stimulus package led to questions about the relevance of MMT. In an interview with Professor Stephanie Kelton, the author of 'The Deficit Myth,' the discussion centered on the relevance of her book and whether MMT still applies outside the United States. It was concluded that inflation occurred due to supply chain disruptions, global factors, and pent-up demand from the pandemic, rather than solely government spending. The debate also addressed the impact of interest rate hikes and the possibility that they may have contributed to inflation. Overall, the interview shed light on the complex factors influencing inflation and the ongoing relevance of MMT.