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Full-Text Articles in Social and Behavioral Sciences
Modern Money Theory (Mmt) In The Tropics: Functional Finance In Developing Countries, MatíAs Vernengo, Esteban PéRez Caldentey
Modern Money Theory (Mmt) In The Tropics: Functional Finance In Developing Countries, MatíAs Vernengo, Esteban PéRez Caldentey
PERI Working Papers
Functional finance is only one of the elements of Modern Money Theory (MMT). Chartal money, endogenous money and an Employer of Last Resort Program (ELR) or Job Guarantee (JG) are often the other elements. We are here interested fundamentally with the functional finance aspects which are central for any discussion of fiscal policy and have received more attention recently. We discuss both the limitations of functional finance for developing countries that have a sovereign currency, but are forced to borrow in foreign currency and that might face a balance of payments (BOP) constraint. We also analyze the limits to borrowing …
The Institutional, Empirical And Policy Limits Of ‘Modern Money Theory’, Gerald Epstein
The Institutional, Empirical And Policy Limits Of ‘Modern Money Theory’, Gerald Epstein
PERI Working Papers
Modern Money Theory (MMT) economists acknowledge a number of empirical and institutional limitations on the applicability of MMT to macroeconomic policy, but they have not attempted to explore these empirically nor have they adequately addressed their implications for MMT’s main macroeconomic policy proposals. This paper identifies some of these important limitations, including those stemming from modern international financial markets, and argues that they are much more binding on the policy applicability of MMT than many of MMT’s advocates appear to recognize. To address these limitations, MMT analysts would have to enter the messy institutional, policy and empirical realms that undermine …