(Bloomberg) -- It’s a contrast for the economic history books.
Proponents of modern monetary theory -- the idea that for countries like the U.S., the government’s ability to borrow in its own currency isn’t constrained, even if its real resources are -- will gather this weekend, starting Friday, at the New School in New York’s Greenwich Village.
A few miles up Manhattan’s West Side, Federal Reserve Bank of New York President John Williams will headline a conference that touches on future frameworks for central-bank money-market operations at Columbia University.
The folks downtown want to rewrite the economics textbook; the seasoned policy makers uptown will be working out how to tweak the operating manual. It’s heterodoxy to the south, orthodoxy to the north.
It’s a timely juxtaposition. MMT fans view budget deficits a way to reach full employment, rebuild infrastructure and pay for anything else. So if they were to get widespread political support -- only a few politicians embrace parts of their agenda -- fiscal policy might be more responsive come the next recession, even if it meant heavy government borrowing. Among other implications, that could shift some of the burden away from monetary policy, for which the second group is laying foundations.
For the modern monetary theory conference agenda, check here. To see the uptown conference agenda, check here. And watch for coverage of both (Williams’ on-record remarks and the MMT conference in it’s entirety) on the terminal and from Bloomberg reporters (@jeannsmialek for Williams, and @ljkawa, @The Stalwart and @katiadmi for MMT).