MMT and Government Finance: You Can't Always Get What You Want

Michael Krause, Thomas Lubik and Karl Rhodes

Richmond Fed Economic Brief, 2021, vol. 21, issue 12

Abstract: During the past 25 years, low interest rates and highly expansionary monetary policy with little apparent inflation have created the illusion that a government can simply print money to fund exorbitant deficit spending with no repercussions. This core tenet of so-called "modern monetary theory" ignores the fact that deficit spending is constrained in the long run by a government's ability to satisfy creditors.

Keywords: Regional; and; Urban; Economics (search for similar items in EconPapers)
Date: 2021
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