PAUL CHRYSTALL: Deflation the key to Magic Pudding recipe

Pattrick Smellie’s article on the Magic Puddings raises interesting questions as to what can and can’t be done in today’s world to finance the government deficit.But it risks muddling the debate in a way that goes to the heart of basic failures in conventional economic thinking.In particular, the tendency of economists - whether advocates of modern monetary theory or conventionalists - to fail to distinguish between balance sheet and regular expenditure.This matters because we may miss the opportunity in front us.Smellie says,...