Modern Monetary Theory: The Bolshevik experiment

Nikolay Nenovsky () and Kevin Dowd

Economic Affairs, 2026, vol. 46, issue 1, 76-98

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.

Date: 2026
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