BOJ chief rejects idea of Japan as 'Modern Monetary Theory' model

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BOJ chief rejects idea of Japan as 'Modern Monetary Theory' model
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Bank of Japan Governor Haruhiko Kuroda rejected an idea gaining traction in some...

TOKYO - Bank of Japan Governor Haruhiko Kuroda rejected an idea gaining traction in some U.S. circles that governments can spend more aggressively without causing hyper-inflation, adding that Tokyo’s economic policies are nowhere close to the concept.

“It’s wrong to assume there will be no hyper-inflation even if you boost fiscal spending recklessly, as long as it’s financed by the central bank,” Kuroda told Japan’s parliament on Thursday. Some fans of MMT have cited Japan as a success case, saying Tokyo has been able to boost fiscal spending without causing inflation as the central bank keeps the government’s borrowing cost ultra-low through its massive stimulus program.

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