Modern monetary theory has been the subject of a pandemic test. Inflation is now on the test.

The problem is that the alternative to a Fed response is, for the moment, not obvious. Attempts by the Biden administration to rein in price hikes — longer port hours, release of strategic oil reserves, calls for higher corporate prices — have mostly tinkered around the edges of the issue.

These kinds of specific measures to counter inflation, however, are what MMT economists would recommend. Ms. Kelton outlined other suggestions MMT economists have made in a recent blog post. Among them: Medicare for All, reducing the Pentagon’s budget, repealing certain tariffs and unclogging the ports.

Not really “easy to do everything”, to use one of his expressions.

“MMT was already quite marginal,” said Jason Furman, a Harvard economist, noting that he says most policymakers and prominent academics were already unaware of it. Even though politics in the pandemic did embrace the idea that you don’t have to pay for your expenses, that idea, he said, was also Keynesian.

And the MMT crowd, while rejecting the role of the Fed, did not come up with a clear and demonstrably workable idea on how to stem inflation, he argued, adding: “If you were open-minded, that would discredit her even more.

In Washington, the flow of ideas has clearly suffered a setback. The deficit problems are back. Biden’s sweeping policy agenda did not pass because Senator Joseph Manchin, a Democrat of West Virginia and a member of his own party, opposed it over concerns about public debt and inflation .

Despite this, some of MMT’s supporters are still ringing the bells.

“We won the debate intellectually – there are no flaws,” Wray said.

Flaws or not, there are questions.

Questions like, “Has Congress ‘experimented’ with MMT, and does rising inflation mean MMT has ‘failed’?”