E-40 and Econometrics

Far more poverty has been alleviated by growth than by any RCT type aid or poverty alleviation program. Like orders of magnitude. Compare China to sub-Saharan Africa.

MMT treats institutional plumbing, like TGA mechanics, reserve accounting, the sequencing of Treasury auctions or Fed operations, as if it were load-bearing for macroeconomic conclusions, but it just isn’t. None of these accounting details alter the consolidated government budget constraint, the intertemporal solvency condition, or the equilibrium conditions pinning down prices and quantities. The substantive content that survives translation into a real model is just Sargent-Wallace and FTPL: fiscal and monetary policy jointly determine the price level. Institutional detail only matters when it changes an agent’s optimization problem via a friction or a market-clearing condition, as in Bianchi-Bigio, where reserve scarcity shapes banks’ portfolio choices and the fed funds rate emerges endogenously. The right test is to model the plumbing exactly to the extent it alters economic decision-making, and not one step further. Most MMT operational claims fail this test, which is why the framework hasn’t produced tractable models macroeconomists actually use.

I have ZERO interest in competing with Lennar Their construction costs are incomprehensibly low.