Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110026
Authors: 
Tymoigne, Éric
Year of Publication: 
2014
Series/Report no.: 
Working Paper, Levy Economics Institute 788
Abstract: 
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.
Subjects: 
Modern Money Theory
Monetary Policy
Fiscal Policy
JEL: 
E02
E42
E52
E62
Document Type: 
Working Paper

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