Phil Armstrong
Published online 17th September 2025
Abstract
In their article, Aboobaker and Ugurlu (2023) provide an outline of what they consider to be the weakness of MMT in terms of contributing insights into the nature of the issues of growth and development in low and middle-income countries and follow that with a critique of the policies advocated by Modern Monetary Theorists with regard to those countries. It is argued here that they provide no compelling arguments against either MMT itself or policies grounded in an understanding of monetary operations as described by MMT.
This response suggests, first, that the authors, knowingly or not, accept several key mainstream assumptions that are counter to the workings of national monetary systems (as described by MMT). Second, the response provides an explanation as to why the authors’ errant framing prevents them from understanding the cause of unemployment, resulting in their support of mainstream arguments about the so-called inflation-unemployment trade-off. Third, the response provides a critique of the false dichotomy with respect to policy put forward by the authors and how this undermines their arguments against the Job Guarantee (JG).
Key words
Modern Monetary Theory, Job Guarantee, Development Policy, Fiscal Space, Full Employment