Pimco Sees MMT Rise Signaling ‘Paradigm Shift’ to Fiscal Policy

The rise of Modern Monetary Theory signals the increasing popularity of using government fiscal tools to stimulate growth, according to Pacific Investment Management Co.

“The recent prominence of MMT in the public debate is symptomatic of a broader paradigm shift away from discussions of fiscal austerity to a new mainstream view that fiscal policy should become a more active tool to stimulate growth, counter the global savings glut and address rising income and wealth inequality,” Joachim Fels and Andrew Balls wrote in an economic outlook released Thursday.