Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/280732 
Year of Publication: 
2023
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 20 [Issue:] 1 [Year:] 2023 [Pages:] 34-42
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
This article examines the misconceptions about modern money theory (MMT) put forward by . The author divides her critique into three categories. First, the Drumetz/Pfister article erroneously indicates that MMT focuses exclusively on the means-of-payment function of money, that it considers money as a pure asset, that it does not distinguish between inside and outside money, and that it does not distinguish between money and the monetary base. Second, Drumetz/Pfister (2021) falsely represent MMT as leaving monetary policy to law and as belittling the impact of quantitative easing. Drumetz/Pfister misunderstand what is meant by government debt being monetized. Third, their article puts forward the incorrect idea that increased government spending could lead to increased long-term interest rates, and that a zero interest rate could supposedly bring about macroeconomic instability and inflation.
Subjects: 
modern money theory
fiscal policy
monetary policy
interest rate
government bonds
money
JEL: 
E12
E43
E51
E52
E58
E62
H62
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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