Macro N Cheese

Steve’s guest this week is Dirk Ehnts, a lecturer and authorwho specializes in modern monetary theory (MMT). They discuss Dirk's new book,"A Simple Guide to the Monetary System," which aims to simplify theoften complex concepts of MMT. They discuss the significance of the Copernican turn to MMT,which refers to the shift in perspective that occurred during the COVID-19pandemic. Dirk explains that the massive increase in government spending andthe lack of inflationary effects challenged conventional economic theories thathad previously dismissed MMT. Dirk explains the theory behind inflation targeting and howit has failed to deliver on its promises of price stability and fullemployment. He also highlights the role of trade policy and income inequalityin shaping economic outcomes, pointing out that these factors are oftenoverlooked in favor of focusing solely on interest rates and inflation.The conversation shifts to the rise of the BRICScountries (Brazil, Russia, India, China, and South Africa) and the geopolit