Third, the right question to ask now is whether a 2% inflation target is reasonable for the next two or three years as spending power is restored. Wouldn’t a year at 4% and two more at 3% make sense in that case? And then decide if 2% might ever make sense again, I suggest. Underlying economic factors might suggest it does not.
MMT doesn’t cause inflation but let’s raise the inflation target so that we can use MMT!
There’s also this idiocy.
It should actually say ‘should’, because people will need to recover their purchasing power.
He’s saying that inflation should be higher so that people can recover their purchasing power. But inflation is that difference between nominal GDP (if we want to use GDP accounting here) and real GDP. Real GDP is real incomes, by definition. Thus inflation is, again by definition, that change in nominal prices which doesn’t get reflected in purchasing power rises.
He’s just said we should all gain weight by eating less food.