In my opinion this adds an important distinction to MMT. It is that not all debt is equal.
It follows that not all money is equal.
And that not all QE is equal either.
The latter I have known for a long time. It was the whole basis for my argument for People’s (or Green) QE back in 2010. The point I made then was that the behavioural, social and economic consequence of injecting money into the economy via banks was always going to be very different to apparently undertaking the same process through a state investment bank that invested in the real or productive economy. Hudson et al have now explained this in most convincing fashion.
Yes, quite so. Which is why we did QE the way we did rather than printing hundreds of billions in money and spending it directly into the real economy.
The inflationary effect depends upon the V part in MV=PQ of course.
The net effect of the difference between types of QE being that you can indeed print and spend directly on real things. But only in extreme moderation.
Print hundreds of billions and you’ve got to play those games with interest rates. Go spend that amount directly and you’re created a firestorm of inflation. Because not all forms of QE are the same.
And the thing is, last time he made his point, a decade back, I made this one too.