Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/284156 
Year of Publication: 
2022
Series/Report no.: 
Cardiff Economics Working Papers No. E2022/13
Publisher: 
Cardiff University, Cardiff Business School, Cardiff
Abstract: 
We set out Modern Monetary Theory (MMT) as a full DSGE model, and test it by indirect inference on post Financial Crisis US data, alongside a standard New Keynesian, NK, model. The MMT model is rejected, while the NK model has a high probability. We then evaluate replacing the Öscal and monetary policies within the NK model by MMT policies, and Önd that they imply a material loss of welfare.
Subjects: 
Modern Monetary Theory
DSGE model
Öscal activism
Wald test
indirect inference
Document Type: 
Working Paper

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