Author(s): Beat Weber
Date published: Apr 2019
SUERF Policy Note, Issue No 67
by Beat Weber, Oesterreichische Nationalbank
JEL-codes: E02, E42, E50, E58.
Keywords: Money, Monetary theory, Legitimacy, Governance, Monetary financing.
In the US, the views of a school of economic thought known as „modern money theory“ (MMT) have received considerable attention in recent economic policy debates. The core message of MMT is to stress room of manoeuvre for economic policy resulting from monetary financing of government deficit spending. It has contributed to a debate about the roles, potential and relationship among the state, the central bank and the private sector in the economic system. While MMT’s claim that it offers a mere description of how money works is misleading, its main contribution is to direct attention towards often neglected monetary implementation issues and their connection to economic policy priorities.
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