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On price stability with a job guarantee

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  • Jackson Mejia
  • Brian C. Albrecht

Abstract

Modern Money Theory (MMT) has risen to prominence in popular policy debates within macroeconomics. MMT economists argue for creating a job guarantee program, which they argue would generate price stability. Using a benchmark model of time consistency supplemented with a job guarantee, we conclude that once policymakers' incentives are considered, the job guarantee does nothing to help stabilize prices. We compare this program to a competing proposal to maintain price stability and full employment, NGDP targeting.

Suggested Citation

  • Jackson Mejia & Brian C. Albrecht, 2022. "On price stability with a job guarantee," Contemporary Economic Policy, Western Economic Association International, vol. 40(4), pages 568-584, October.
    • Handle: RePEc:bla:coecpo:v:40:y:2022:i:4:p:568-584
    DOI: 10.1111/coep.12573
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