I want to write more about this but before I am off to a set of meetings I will answer Dean Baker who asks

Modern Monetary Theory: What’s Modern About It?

The short answer is a floating fiat currency – not a gold standard, not fixed exchange rates.

The short, short of MMT is that it is Market Monetarism in reverse. Just as Scott Sumner insists that people recognize Fiscal is dependent on Monetary. MMT asks the people recognize that Monetary is dependent of Fiscal.

They are both right as far as their mechanisms go, though I find it easier to think in terms of the natural rate of interest.

Though the proponents – in my view – seem to make a bigger deal out of it than is in the theory itself.

An earlier version of this post contained some unfortunate commentary on my part. I apologize for that.