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RE: MODERN MONETARY THEORY - can anyone explain major differences between MMT and current monetary system?

in Project HOPE6 years ago

So, I didn't had much time to fully research it yet, but here is what I was able to grasp:

  • The base idea of MMT is that the government can print money, therefore it can have no debts. All government debts could be paid if enough money were printed by it.

  • In common kenesyan economic model, adopted by almost all countries is the world, the government funds to pay it's expenses/debt come from taxes. But in the MMT model, since the government expenses/debt can be paid at any time (just print more money), taxes become a tool to reduce/control inflation.

  • if I got this right, the inflation/economy growth wouldn't be directed/controlled by monetary policies, like base interest rates, but by how the taxes and money printed to pay debt are balanced.

From what I read, it seems that those who advocate this model seems to think it would be a better solution to also improve unemployment rates.

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 6 years ago  

Dear @phgnomo

I fully appreciate your awersome feedback @phgnomo

Yours, Piotr