Modern Monetary Theory

Modern Monetary Theory is the idea that a government issuer of fiat currency only needs to be concerned about inflation, taxation and debt are simply tools used to control that inflation. In contrast, conventional wisdom focuses on debt and that fact that increased deficits will require pay down by future generations through higher taxes. MMT’s retort is that government can just print more money to pay debts and then use tax and borrowing to control inflation. One counter point to this idea is that budgets regulate government power and uncapping spending is likely to lead to fraught results1.

One book in this area is The Deficit Myth by Stephanie Kelton2.


Wang, J. J. Central Banking 101. (Joseph, 2021).
Kelton, S. The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy. (PublicAffairs, 2020).

Links to this note