Modern Money Theory and Interrelations between the Treasury and the Central Bank: The Case of the United States
One of the main contributions of Modern Money Theory (MMT) has been to explain why monetarily sovereign governments have a very flexible policy space that is unconstrained by hard financial limits. Not only can they issue their own currency to pay public debt denominated in their own currency, but they can also easily bypass any self-imposed constraint on budgetary operations. Through a detailed analysis of the institutions and practices surrounding the fiscal and monetary operations of the treasury and central bank of the United States, the eurozone, and Australia, MMT has provided institutional and theoretical insights into the inner workings of economies with monetarily sovereign and nonsovereign governments. The paper shows that the previous theoretical conclusions of MMT can be illustrated by providing further evidence of the interconnectedness of the treasury and the central bank in the United States.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marc Lavoie, 2013.
"The Monetary and Fiscal Nexus of Neo-Chartalism: A Friendly Critique,"
Journal of Economic Issues,
M.E. Sharpe, Inc., vol. 47(1), pages 1-32, March.
- Marc Lavoie, 2013. "The monetary and fiscal nexus of neo-chartalism: A friendly critique," Post-Print hal-01343744, HAL.
- Paul J. Santoro, 2012. "The evolution of Treasury cash management during the financial crisis," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 18(Apr).
- Milton H. Marquis, 2002. "Setting the interest rate," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue oct11.
- Stephanie Bell & L. Randall Wray, 2002. "Fiscal effects on reserves and the independence of the Fed," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 25(2), pages 263-271, December.
- Robert Eisner, 1998. "Save Social Security from Its Saviors," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 21(1), pages 77-92, October.
- Scott T. Fullwiler, 2006. "Setting interest rates in the modern money era," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 28(3), pages 496-525, April.
- Ann-Marie Meulendyke, 1998. "U.S. monetary policy and financial markets," Monograph, Federal Reserve Bank of New York, number 1998mpaf.
- George A. Kahn, 2010. "Monetary policy under a corridor operating framework," Economic Review, Federal Reserve Bank of Kansas City, issue Q IV, pages 5-34. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:lev:wrkpap:wp_788. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marie-Celeste Edwards)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.