Modern Money Theory (MMT) is supposed to generate economic and financial instability through loose fiscal and monetary policies and its ignorance of external constraints. MMT is associated with policies that result in hyperinflation, wastes and financial crises. This chapter notes that MMT does...

Modern Money Theory (MMT) policy recommendations are said to promote fiscal dominance and irresponsible budgeting, and to misjudge or ignore the institutional existing constraints. As such, MMT is argued to provide a poor framework to manage policymaking. This chapter shows that MMT advances a...

Critiques have argued that Modern Money Theory (MMT) conceptualization and understanding of monetary systems are either underdeveloped or incorrect. MMT minimizes the role of private banks, ignores evidences of primitive money and the role of barter, and overemphasizes the role of fiat. This...

In the aftermath of the Global Financial Crisis, many governments championed loose monetary policy in conjunction with fiscal austerity which led to stagnation. In response, some recommended the implementation of Overt Monetary Financing (OMF) - ceasing to issue government bonds even when...

Modern Money Theory explains that a national government with sovereign currency does not face a financial constraint. While this was well understood in the early postwar period, it was gradually “forgotten” as the neoclassical theory of the household budget constraint was applied to...

This chapter discusses how European nation states participating in the Eurozone gave up their monetary sovereignty as defined by Modern Money Theory. The national governments became users, not issuers of currency. The lack of currency sovereignty affected Eurozone member countries’ ability to...

This chapter examines the general advantages of a Green Job Guarantee (JG) as a sustainable development policy and then inquires about the potential and feasibility of a Green JG for China as a case study. A JG offers an unorthodox yet logical solution to unemployment: eliminate joblessness by...

This chapter employs a Modern Money Theory approach to show that the State and public money play an indispensable role in creating development finance. It demonstrates that the Chinese State has utilized its sovereign monetary power to provide development finance and promote economic growth in...

According to critics, Modern Monetary Theory (MMT) is irrelevant to developing countries as it would only “apply” to developed countries, or worse yet, to the few ones that issue an international reserve currency. The present chapter counters this claim by offering two arguments. As a...

Modern Money Theory (MMT) does not explicitly deal with the balance of payments, because it deals with domestic currency, not foreign exchange. However, MMT urges that countries should not rely on foreign creditors for money that is to be spent domestically. Converting foreign currency into...