What is modern monetary theory? Modern monetary theory and mainstream monetary theory include...

What is modern monetary theory?


Modern Monetary Theory（Modern Monetary Theory, abbreviated asMMT）The development of post Keynesian economics is based on Keynesianism, national currency theory, endogenous currency theory, and other theories, with a focus on discussing how fiscal policy and central bank monetary policy operate in harmony.





The main viewpoints of modern monetary theory


1Modern monetary theory holds that the government spends money by creating it, and fiscal expenditure precedes income.


2The issuance of government bonds is not for borrowing funds, but is similar to monetary policy operations, which can help the central bank maintain market interest rates.


3The goal of fiscal policy is not balance. Supporters of modern monetary theory advocate for "functional finance", and the goal of fiscal policy is to achieve full employment.


What are the differences between modern monetary theory and mainstream monetary theory?
1Firstly, in modern monetary theory, sovereign governments do not need to borrow for expenditure, while the mainstream view is that the government issues bonds to compensate for insufficient fiscal revenue.


2Secondly, modern monetary theory suggests that fiscal expenditures are funded by monetary creation, while mainstream views suggest that central banks should be independent of finance.


3Finally, modern monetary theory holds that fiscal deficits are not terrifying, and the goal of fiscal policy is to ensure full employment rather than maintaining fiscal balance. Traditional views suggest that government fiscal deficits need to be constrained, otherwise it will damage sovereign credit and significantly push up interest rates


What impact will modern currency have on the stock market? The current US economy will have an impact onAWhat is the impact of stocks?


For more information on modern monetary theory and private equity rankings, please refer to the following article on the private equity ranking website


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