FICC Luncheon with Prof Bill Mitchell

Professor Bill Mitchell, one of the key founders of MMT

FICC Luncheon with Prof Bill Mitchell

Modern Monetary Theory (MMT):  Implications for Institutional Investors

MMT has received much attention recently as it has been embraced by a number of Democratic US politicians, including US Representative Alexandria Ocasio-Cortez, as a way of explaining why governments should drive the transition to a low carbon economy (The Green New Deal) and why they can afford to do so.

But MMT is also increasingly embraced by institutional investors, as it provides a framework for understanding how government debt fits within the broader monetary machine. Institutional investors need government debt to provide them with the risk-free rate as a benchmark against which to measure investment risk, but they are also wary of inflation.

Professor Bill Mitchell, one of the key founders of MMT, will discuss why the connection between government debt and inflation is less direct than often is thought and why running Federal budget surpluses is detrimental to private sector growth.