![]() Thus, in spite of some claims that Minsky should not be counted as one of the “forefathers” of Modern Money Theory (MMT), this paper argues that it is Minsky, not Lerner, whose work remains essential for the further development of MMT. However, Minsky never rejected his early beliefs that countercyclical government budgets must play a significant role in stabilizing the economy. Minsky’s views of functional finance became more nuanced, in line with his Institutionalist approach to the economy. The paper compares and contrasts the evolution of the views of Minsky and Lerner over the postwar period, arguing that Lerner’s transition went further, as he embraced a version of Monetarism that emphasized the use of monetary policy over fiscal policy. However, with the rise of the Phillips curve, the return of the Quantity Theory, the development of the notion of a government budget constraint, and accelerating inflation at the end of the 1960s, functional finance fell out of favor. It argues that the main principles of functional finance were relatively widely held in the immediate postwar period. This paper examines the views of Hyman Minsky and Abba Lerner on the functional finance approach to fiscal policy. Explorations in Theory and Empirical AnalysisĪ Comparison of the Evolution of the Positions of Hyman Minsky and Abba Lerner.Immigration, Ethnicity, and Social Structure.Levy Institute Measure of Time and Income Poverty.Levy Institute Measure of Economic Well-Being. ![]() Monetary Policy and Financial Structure.The State of the US and World Economies.
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