Modern Monetary Theory (MMT)

An Evaluation of its Premises and its Political Consequences

Authors

  • Antony Peter Mueller
  • Samuel Fernandes Lucena Vaz-Curado UFS

DOI:

https://doi.org/10.30800/mises.2019.v7.1211

Keywords:

Modern Monetary Theory, Kalecki, public debt, unemployment, interventionism

Abstract

The Modern Monetary Theory (MMT) has gained center stage of economic debate with proposals for major social and environmental welfare projects in the United States. This article aims to present the basic assumptions of MMT and its position in economic theory. The roots of MMT are associated with the neo-Marxist economist Michal Kalecki, who asserts that deficits do not matter. The adherents of MMT argue that projects such as Medicare for All, Green New Deal, and job security face no major fiscal restraint. For the government as the sovereign creator of the national currency as a legal tender, budget deficits do not matter because it can always create as much money as is necessary to finance its expenditures. The paper discusses the main policy proposals of Modern Monetary Theory and elaborates the critique and limitations of its agenda.

Downloads

Download data is not yet available.

Metrics

Metrics Loading ...

References

BARBIERI, Fabio. A Economia do Intervencionismo. São Paulo: Instituto Ludwig von Mises, 2013.

CARVALHO, Marcelo Soares de. Abba Lerner à sombra e à luz de John Maynard Keynes: convergência e divergência em teoria e política econômica. Economia e Sociedade, Campinas, v. 27, n. 3, 2018. DOI: https://doi.org/10.1590/1982-3533.2018v27n3art2

DE CONTI, Bruno Martarello; PRATES, Daniela Magalhães; PLIHON, Dominique. A hierarquia monetária e suas implicações para as taxas de câmbio e de juros e a política econômica dos países periféricos. Economia e Sociedade, Campinas, v. 23, n. 2 (51), 2014. DOI: https://doi.org/10.1590/S0104-06182014000200003

DOMAR, Evsey: The “Burden of the Debt” and the National Income. American Economic Review, v. 34, 1944.

FORSTATER, Mathew; MOSLER, Warren. The Natural Rate of Interest Is Zero. Journal of Economic Issues, v. 39, n. 2, 2005. DOI: https://doi.org/10.1080/00213624.2005.11506832

HAYEK, Friedrich August von. Economics and Knowledge. Economica, v. 4, 1937. DOI: https://doi.org/10.2307/2626886

HAYEK, Friedrich August von. The Pretence of Knowledge. The American Economic Review, v. 79, n. 6, 1989.

HAYEK, Friedrich August von. The Use of Knowledge in Society. American Economic Review, v. 35, n. 4, 1945.

HIDALGO, Esteban Cruz; MORUNO, Francisco Parejo; PRECIADO, José Rangel. El equivalente general en la génesis del dinero de Marx: el dinero como criatura del Estado. DT-AEHE. Documentos de Trabajo – Asociacion Española de Historia Economica, n. 1905, 2019.

IORIO, Ubiratan Jorge. Ação, Tempo e Conhecimento. A Escola Austríaca. São Paulo: Instituto Mises Brasil, 2011.

KALECKI, Michal. Essays in the Theory of Economic Fluctuations. Routledge, 2013. DOI: https://doi.org/10.4324/9781315016818

KALECKI, Michal. Three Ways to Full Employment. Oxford University Institute of Statistics. The Economics of Full Employment. Oxford: Basil Blackwell, 1944.

KELTON, Stephanie. Bernie Sanders’ 2016 economic advisor Stephanie Kelton on Modern Monetary Theory and the 2020 race. CNBC, 2019. Disponível em: https://www.cnbc.com/2019/03/01/bernie-sanders-economicadvisor- stephanie-kelton-on-mmt-and-2020-race.html. Acessado em: 30 mar 2019.

KEYNES, John Maynard. A Teoria Geral do Emprego, do Juro e da Moeda. São Paulo: Nova Cultural Ltda., 1996.

KNAPP, Georg Friedrich. The State Theory of Money. Journal of Political Economy, v. 34, n. 3, 1924.

LERNER, Abba P. Functional Finance And The Federal Debt. Social Research, v. 10, n. 1, 1943.

MENGER, Carl. On the Origin of Money. The Economic Journal, v. 2, n. 6, 1892. DOI: https://doi.org/10.2307/2956146

MINSKY, Hyman P.. The Relevance of Kalecki. Hyman P. Minsky Archive. Paper 306, 1986.

MISES, Ludwig von. Ação Humana. Um Tratado de Economia. São Paulo: Instituto Ludwig von Mises Brasil, 2010.

MITCHELL, William; MUYSKEN, Joan. Full Employment Abandoned: Shifting Sands and Policy Failures. Edward Elgar, 2008. DOI: https://doi.org/10.4337/9781848441422

MITCHELL, William; WRAY, L. Randall; WATTS, Martin. Macroeconomics. Red Globe Press, 2019.

MOSLER, Warren. The Seven Deadly Innocent Frauds of Economic Policy. Valance Co., 2010.

MUELLER, Antony. Beyond the State and Politics. Capitalism for the new millennium. Brasil: Amazon, 2018a.

MUELLER, Antony. The Middle-Income Trap in the Perspective of the Austrian Capital Theory. MISES: Interdisciplinary Journal of Philosophy, Law and Economics, v. 6 (Special Issue), São Paulo, 2018b. DOI: https://doi.org/10.30800/mises.2018.v0.961

MURRAY, Michael J.; FORSTATER, Mathew. The Job Guarantee and Modern Money Theory: Realizing Keynes’s Labor Standard. Nova Iorque: Palgrave Macmillan, 2017. DOI: https://doi.org/10.1007/978-3-319-46442-8

PALLEY, Thomas. Modern Money Theory (MMT): the emperor still has no clothes. Thomas Palley: Economics for Democratic and Open Societies, 2014. Disponível em: http://www.thomaspalley.com/?p=393. Acessado em: 30 mar 2019.

RESENDE, André Lara. Consenso e Contrassenso: déficit, dívida e previdência. CEBRI Dossiê, v. 4, ano 18, Rio de Janeiro, 2019.

RESENDE, André Lara. Juros, Moeda e Ortodoxia. São Paulo: Portfolio-Penguin, 2017.

ROBINSON, Joan. Kalecki and Keynes. In: BARAN, P. A.. Problems of Economic Dynamics and Planning: Essays in Honour of Michal Kalecki. Oxford: Pergamon, 1966.

VERGNHANINI, Rodrigo; DE CONTI, Bruno. Modern Money Theory: a criticism from the periphery. Brazilian Keynesian Review, v. 3, n. 2, 2017. DOI: https://doi.org/10.33834/bkr.v3i2.115

VIEIRA FILHO, L. A. M.. Financiamento do setor público e “crise fiscal” na recessão de 2015 e 2016: uma abordagem neocartalista. X Encontro Internacional da Associação Keynesiana, Brasília, 2017.

VIEIRA FILHO, L. A. M.. Modern Money Theory e os títulos públicos de longo prazo em países periféricos: a experiência brasileira nos anos 80 e 90. XI Encontro Internacional da Associação Keynesiana Brasileira. Desafios para a Economia Brasileira: uma perspectiva keynesiana, Porto Alegre, 2018.

WRAY, L. Randall. Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. Nova Iorque: Palgrave Macmillan, 2015. DOI: https://doi.org/10.1057/9781137539922

WRAY, L. Randall. Senhoriagem ou soberania? Economia e Sociedade, Campinas, v. 11, n. 2 (19), 2002.

WRAY, L. Randall. Understanding Modern Money: The Key to Full Employment and Price Stability. Cheltenham, U.K: Edward Elgar, 1999.

Published

2019-08-19

How to Cite

1.
Mueller AP, Vaz-Curado SFL. Modern Monetary Theory (MMT): An Evaluation of its Premises and its Political Consequences. MisesJournal [Internet]. 2019 Aug. 19 [cited 2024 Nov. 5];7(2). Available from: https://misesjournal.org.br/misesjournal/article/view/1211

Issue

Section

Original Research Articles