IDEAS home Printed from https://ideas.repec.org/a/bla/ecaffa/v46y2026i1p76-98.html

Modern Monetary Theory: The Bolshevik experiment

Author

Listed:
  • Nikolay Nenovsky
  • Kevin Dowd

Abstract

In this article we present the monetary theory, known as the ‘Theory of the Emission Economy’, most fully formulated over a century ago by the Russian economist S. A. Falkner (1890–1938). It is strikingly reminiscent of Modern Monetary Theory. The Theory of the Emission Economy was put into practice soon after the October 1917 Bolshevik Revolution and ended in an inflationary catastrophe. Lenin himself, who at first shared its basic ideas, was eventually forced to support a monetary stabilisation based on the introduction of gold coins, the chervonets, that was completed in early 1924, and which ultimately resolved the monetary crisis along conventional monetary lines. This disastrous Bolshevik monetary experiment stands as a clear warning to modern MMT advocates who seek to implement it in a contemporary setting.

Suggested Citation

  • Nikolay Nenovsky & Kevin Dowd, 2026. "Modern Monetary Theory: The Bolshevik experiment," Economic Affairs, Wiley Blackwell, vol. 46(1), pages 76-98, February.
    • Handle: RePEc:bla:ecaffa:v:46:y:2026:i:1:p:76-98
    DOI: 10.1111/ecaf.70028
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecaf.70028
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecaf.70028?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eric Tymoigne & L. Randall Wray, 2013. "Modern Money Theory 101: A Reply to Critics," Economics Working Paper Archive wp_778, Levy Economics Institute.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nikolay Nenovsky, 2020. "The Theory of the Emission Economy Bolshevik roots of "Modern Monetary Theory"," Working Papers hal-04084551, HAL.
    2. Guglielmo Forges Davanzati, 2020. "The Italian Economic Decline and the Proposal of the State as Innovator of First Resort," Working Papers 0049, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    3. Eduardo Garzón Espinosa & Esteban Cruz Hidalgo & Bibiana Medialdea García & Carlos Sánchez Mato, 2023. "The “Control Space†of the State: A Key Element to Address the Nature of Money," Review of Radical Political Economics, Union for Radical Political Economics, vol. 55(3), pages 448-465, September.
    4. Eric Tymoigne & L. Randall Wray, 2015. "Modern Money Theory: A Reply to Palley," Review of Political Economy, Taylor & Francis Journals, vol. 27(1), pages 24-44, January.
    5. Thomas I. Palley, 2015. "The Critics of Modern Money Theory (MMT) are Right," Review of Political Economy, Taylor & Francis Journals, vol. 27(1), pages 45-61, January.
    6. Vladan Hodulák & Oldřich Krpec, 2015. "Francouzsko-Německé monetární vztahy - pnutí v základech eurozóny [Franco-German Monetary Relations - Tensions Built Into the Eurozone Core]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(4), pages 413-435.
    7. Rohwer, Götz & Behr*, Andreas, 2020. "Banks' Contribution to Government Debts," MPRA Paper 100935, University Library of Munich, Germany.
    8. Peter Bofinger, 2020. "Kommt nach der Corona-Krise die Inflation?," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 100(11), pages 825-829, November.
    9. Aloys L. Prinz & Hanno Beck, 2021. "Modern Monetary Theory: A Solid Theoretical Foundation of Economic Policy?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 49(2), pages 173-186, June.
    10. Eltejaei, Ebrahim & Montazeri Shoorekchali, Jalal, 2021. "Investigating the Relationship between Money Growth and Inflation in Turkey: A Nonlinear Causality Approach," Journal of Money and Economy, Monetary and Banking Research Institute, Central Bank of the Islamic Republic of Iran, vol. 16(3), pages 305-322, September.
    11. Biagio Bossone, 2020. "Why MMT can’t work: A Keynesian Perspective," Working Papers PKWP2020, Post Keynesian Economics Society (PKES).
    12. Emilio Carnevali & Matteo Deleidi, 2020. "The Trade-off between Inflation and Unemployment in an MMT World: An Open Economy Perspective," Economics Working Paper Archive wp_973, Levy Economics Institute.
    13. Sergio Cesaratto, 2016. "The state spends first: Logic, facts, fictions, open questions," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 39(1), pages 44-71, January.
    14. Shvets, Serhii, 2017. "Internal public debt and economic growth: a case study of Ukraine," MPRA Paper 103873, University Library of Munich, Germany, revised 2017.
    15. Tianhao Zhi, 2015. "A Critique of Modern Money Theory and the Disequilibrium Dynamics of Banking and Government Finance," Working Paper Series 184, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    16. Tianhao Zhi, 2016. "Animal Spirits and Financial Instability - A Disequilibrium Macroeconomic Perspective," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 1-2016, January-A.
    17. Guillaume l'Oeillet, 2022. "Modern Monetary Theory: wrong ideas, real limits and blind spots. An overview of the critics [La Théorie Monétaire Moderne : idées fausses, vraies limites et angles morts. Un tour d’horizon des critiques]," Post-Print hal-03854814, HAL.
    18. Olk, Christopher & Schneider, Colleen & Hickel, Jason, 2023. "How to pay for saving the world: Modern Monetary Theory for a degrowth transition," Ecological Economics, Elsevier, vol. 214(C).
    19. Strachman, Eduardo & Souza Fraga, Jefferson & Guidorzzi Girotto, Vitor, 2025. "Monetary and fiscal policies as public goods: rethinking individual policies as well as their coordination for economic growth and employment," MPRA Paper 126340, University Library of Munich, Germany, revised 25 Sep 2025.
    20. Joseph Emmanuel Tetteh & Anthony Amoah & Deodat Emilson Adenutsi, 2019. "Drivers of Stock Market Returns in Sub-Saharan Africa: Evidence from Selected Countries," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(3), pages 191-208, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecaffa:v:46:y:2026:i:1:p:76-98. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0265-0665 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.