Editing Franco Modigliani (section)

==Criticism==
Modigliani's work on fiscal policy came under criticism from followers of [[Post-Keynesian economics]], who disputed the "Keynesianism" of his viewpoints, pointing out his contribution to the [[NAIRU]] concept,<ref>[[Bill Mitchell (economist)|Mitchell, William]] (2016) "[http://bilbo.economicoutlook.net/blog/?p=32828 The Modigliani controversy: The break with Keynesian thinking]", 21 January 2016</ref> as well as his general stance on [[fiscal policy|fiscal deficits]].<ref>E.g. Modigliani Andre & Franco Modigliani (1987) "The Growth of the Federal Deficit and the pole of public attitudes", ''[[Public Opinion Quarterly]]'', Volume 51, [[University of Chicago]] Press, pp. :459–480</ref> The Modigliani-Miller theorem implies that, for a closed economy, state borrowing is merely deferred [[tax]]ation, since state spending can be financed only by "[[fiscal policy|printing money]]", taxation, or borrowing, and therefore monetary financing of state spending implies the subsequent imposition of a so-called "inflation tax," which ostensibly has the same effect on [[permanent income]] as explicit taxation.<ref group=note>See "[[crowding out effect]]"</ref><ref>Blejer, Mario I.Adrienne Cheasty (1993) "How to measure the fiscal deficit : analytical and methodological issues", Washington, DC : [[International Monetary Fund]]</ref>

Nonetheless, they acknowledged his dissenting voice on the issue of unemployment, in which Modigliani concurred early on<ref>Modigliani, Franco (2000) "Europe"s Economic Problems", ''Carpe Oeconomiam Papers in Economics'', 3rd Monetary and Finance Lecture, Freiburg, 6 April 2000</ref> with [[heterodox economist]]s that Europe-wide unemployment in the late 20th century was caused by the lack of [[demand]] induced by [[austerity]] policies.<ref>[[Bill Mitchell (economist)|Mitchell, William]] (2011) "[http://bilbo.economicoutlook.net/blog/?p=15250 Lies, damned lies, and statistics]", 13 July 2011</ref><ref group=note>Demand-driven fiscal policies, as opposed to [[supply-side economics|supply-driven]], are a cornerstone of Keynesian and Post-Keynesian economics. For a critique of European economic policies from a modern, Post-Keynesian point of view, see e.g. Mitchell, William (2016) ''Eurozone Dystopia: Groupthink and Denial on a Grand Scale'',  [[Edward Elgar]], 2015, {{ISBN|978-1784716653}}</ref>