Macro Voices MacroVoices #275 Steve Keen: Inflation Will Not Run Away
Jun 10, 2021
Steve Keen, a renowned professor of economics known for his insights on debt and inflation, joins the discussion. He asserts that while inflation is on the horizon, it won't lead to the runaway fears some have. Keen critiques Austrian economic theories, explores the impacts of COVID-19 on supply chains, and examines the interplay between climate change and economic stability. He advocates for a new economic model that integrates environmental factors and highlights innovative investment approaches in farmland.
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Inflation Drivers Then vs. Now
- Current inflation shocks differ from the 1970s due to lower credit demand and worker bargaining power.
- This suggests a potential price spike, but not sustained runaway inflation like in the 70s.
Inflation and Bond Rates
- Central bank actions, not inflation itself, primarily drive short-term bond rate increases.
- The central bank sets short-term rates; market forces influence long-term rates.
MMT Explained
- MMT describes the mechanics of government debt, spending, and borrowing, using accounting principles.
- It challenges conventional economic theories on deficits and their impact on private investment.
