A Critique of MMT(Modern Monetary Theory) and Fiscal Deficits

2021 ◽  
Vol 23 (3) ◽  
pp. 3-50
Author(s):  
Myung-bae Yeom
Keyword(s):  
Monetary Theory ◽  
Fiscal Deficits

Is Now the Time for Modern Monetary Theory or Permanent Monetary Finance?

2021 ◽  
Vol 54 (1) ◽  
pp. 17-36
Author(s):  
Olaf Schlotmann
Keyword(s):  
Balance Sheet ◽  
Critical Examination ◽  
Monetary Theory ◽  
Government Bond ◽  
Current Crisis ◽  
Fiscal Deficits ◽  
Government Bonds ◽  
The Government ◽  
Private Investors ◽  
Key Aspects

In response to the COVID-19 pandemic, G7 central banks have launched asset purchase programs in anticipation of an increase in government bond offerings to finance ballooning fiscal deficits. As the volume of government bonds owned by private investors is not expected to rise during the current crisis, these programs will amount to a monetization of large additional debt. The idea that the government sells bonds to the central bank or issues money by literally spending it into existence also plays a key role in Modern Monetary Theory (MMT), the concept of helicopter money and the idea of permanent monetary finance. This article subjects key aspects of MMT to critical examination and shows, using MMT’s own balance sheet analysis, that the theory is almost always contradicted by the actual workings of the modern credit economy. In fact, MMT seems to be a collection of prescriptive ideas that dictate how things should function as opposed to how they actually do.

Modern monetary theory offers few novelities

2019 ◽  
Keyword(s):  
Private Sector ◽  
Full Employment ◽  
Economic Effects ◽  
Monetary Theory ◽  
Fiscal Deficits ◽  
Content Type ◽  
New School ◽  
Presidential Candidates ◽  
The Past ◽  
Economic Thinking

Subject Modern monetary theory. Significance Over the past year, academia and policymakers have devoted much attention to a new school of economic thinking, modern monetary theory (MMT). According to this, governments could -- and should -- spend as much as they can to achieve full employment. Governments can print money to finance this as they own the monopoly over currency and do not need revenues to finance such expenditure as states cannot go bankrupt. Impacts US presidential candidates could advocate MMT to promise high spending with no deleterious economic effects. MMT will tempt governments as it promises that they can finance large fiscal deficits cheaply. According to MMT, public deficits cannot be compared to private-sector budgets and have more flexibility to expand.

Is money the creation of the state or the market? (On the “modern monetary theory” as described in the textbook by W. Mitchell, L. R. Wray and M. Watts “Macroeconomics”)

2020 ◽  
pp. 121-134
Author(s):  
S. A. Andryushin
Keyword(s):  
Public Debt ◽  
Scientific Community ◽  
Full Employment ◽  
Term Effect ◽  
Scientific Concept ◽  
Monetary Theory ◽  
Left Wing ◽  
Medium Term ◽  
Short Term ◽  
Stimulation Of

In 2019, a textbook “Macroeconomics” was published in London, on the pages of which the authors presented a new monetary doctrine — Modern Monetary Theory, MMT, — an unorthodox concept based on the postulates of Post-Keynesianism, New Institutionalism, and the theory of Marxism. The attitude to this scientific concept in the scientific community is ambiguous. A smaller part of scientists actively support this doctrine, which is directly related to state monetary and fiscal stimulation of full employment, public debt servicing and economic growth. Others, the majority of economists, on the contrary, strongly criticize MMT, arguing that the new theory hides simple left-wing populism, designed for a temporary and short-term effect. This article considers the origins and the main provisions of MMT, its discussions with the mainstream, criticism of the basic tenets of MMT, and also assesses possible prospects for the development of MMT in the medium term.

Two Intellectual Landmarks in the Year 1749

2019 ◽  
Vol 17 (2) ◽  
pp. 101-123
Author(s):  
Farhad Rassekh
Keyword(s):  
Paradigm Shift ◽  
David Hume ◽  
Adam Smith ◽  
Considerable Extent ◽  
Monetary Theory ◽  
Economic Theories ◽  
Classical Economics ◽  
Wealth Of Nations ◽  
Economic Thinking

In the year 1749 Adam Smith conceived his theory of commercial liberty and David Hume laid the foundation of his monetary theory. These two intellectual developments, despite their brevity, heralded a paradigm shift in economic thinking. Smith expanded and promulgated his theory over the course of his scholarly career, culminating in the publication of The Wealth of Nations in 1776. Hume elaborated on the constituents of his monetary framework in several essays that were published in 1752. Although Smith and Hume devised their economic theories in 1749 independently, these theories complemented each other and to a considerable extent created the structure of classical economics.

Fiscal Deficits and the Role of Fiscal Governance: The Case of Greece

2011 ◽  
Author(s):  
Georgia Kaplanoglou ◽  
Vassilis T. Rapanos
Keyword(s):  
Fiscal Deficits ◽  
Of Greece
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