Modern Monetary Theory (MMT) had a real moment in the spotlight in the late 2010s, with political support in the US from Presidential hopefuls Bernie Sanders and Alexandria Ocasio-Cortez. However, mainstream economists mostly didn't understand it, or ridiculed it, or both. I mostly ignored the detail of it, only picking up what I knew about it from the mainstream media. Some economists took it a little more seriously. At least seriously enough to look into it in more detail.
One example is this 2020 article by Gregory Mankiw (Harvard University), published in the AEA Papers and Proceedings (ungated earlier version here). Mankiw carefully explored a new textbook:
...simply titled Macroeconomics, written by three MMT proponents: William Mitchell and Martin Watts (both of the University of Newcastle, Australia) and L. Randall Wray (Bard College).
Mankiw then compares the MMT textbook treatment of macroeconomic issues with a more traditional approach (such as that found in Mankiw's own textbooks). Obviously, Mankiw has good reason to challenge other textbook treatments as they compete with his offering. So, we should be careful in over-interpreting Mankiw's views. Mankiw concludes that:
In the end, my study of MMT led me to find some common ground with its proponents without drawing all the radical inferences they do. I agree that the government can always print money to pay its bills. But that fact does not free the government from its intertemporal budget constraint. I agree that the economy normally operates with excess capacity, in the sense that the economy’s output often falls short of its optimum. But that conclusion does not mean that policymakers only rarely need to worry about inflationary pressures. I agree that, in a world of pervasive market power, government price setting might improve private price setting as a matter of economic theory. But that deduction does not imply that actual governments in actual economies can increase welfare by inserting themselves extensively in the price-setting process.
Put simply, MMT contains some kernels of truth, but its most novel policy prescriptions do not follow cogently from its premises.
Based on those conclusions, it is unlikely that MMT is going to have much impact on the economics mainstream. However, it is worth keeping Mankiw's views handy, because MMT is something that caught the public's (and politicians') attention, and even though it doesn't have the profile now that it did five or more years ago, it will likely remain a factor in public debate for some time.
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