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MMT and Government Finance: You Can't Always Get What You Want

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During the past 25 years, low interest rates and highly expansionary monetary policy with little apparent inflation have created the illusion that a government can simply print money to fund exorbitant deficit spending with no repercussions. This core tenet of so-called "modern monetary theory" ignores the fact that deficit spending is constrained in the long run by a government's ability to satisfy creditors.

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  • Michael U. Krause & Thomas A. Lubik & Karl Rhodes, 2021. "MMT and Government Finance: You Can't Always Get What You Want," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 21(12), April.
    • Handle: RePEc:fip:fedreb:92725
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    File URL: https://www.richmondfed.org/publications/research/economic_brief/2021/eb_21-12
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    Cited by:

    1. Françoise Drumetz & Christian Pfister, 2021. "The Meaning of MMT," Working papers 833, Banque de France.

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    Regional and Urban Economics;

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