Modern money theory: some basics in response to Drumetz/Pfister

Artikel

This article examines the misconceptions about modern money theory (MMT) put forward by . The author divides her critique into three categories. First, the Drumetz/Pfister article erroneously indicates that MMT focuses exclusively on the means-of-payment function of money, that it considers money as a pure asset, that it does not distinguish between inside and outside money, and that it does not distinguish between money and the monetary base. Second, Drumetz/Pfister (2021) falsely represent MMT as leaving monetary policy to law and as belittling the impact of quantitative easing. Drumetz/Pfister misunderstand what is meant by government debt being monetized. Third, their article puts forward the incorrect idea that increased government spending could lead to increased long-term interest rates, and that a zero interest rate could supposedly bring about macroeconomic instability and inflation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: European Journal of Economics and Economic Policies: Intervention (EJEEP) ; ISSN: 2052-7772 ; Volume: 20 ; Year: 2023 ; Issue: 1 ; Pages: 34-42

Classification and Topics

• Classification: Wirtschaft ; General Aggregative Models: Keynes; Keynesian; Post-Keynesian ; Interest Rates: Determination, Term Structure, and Effects ; Money Supply; Credit; Money Multipliers ; Monetary Policy ; Central Banks and Their Policies ; Fiscal Policy ; National Deficit; Surplus
• Subject: modern money theory ; fiscal policy ; monetary policy ; interest rate ; government bonds ; money

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Leclaire, Joëlle
• Event: Veröffentlichung
• (who): Edward Elgar Publishing
• (where): Cheltenham
• (when): 2023

Further information

• DOI: doi:10.4337/ejeep.2022.0089
• Handle: http://hdl.handle.net/10419/280732
• Last update: 10.03.2025, 11:42 AM CET