Do Japanese Economic Puzzles Validate Modern Monetary Theory?

Yuqing Xing

East Asian Policy (EAP), 2019, vol. 11, issue 04, 98-107

Abstract: Modern monetary theory (MMT) claims that a monetary sovereign government has an unlimited financial capacity to purchase whatever it wishes and fulfil its future financial obligations. It is impossible for a monetary sovereign government to be insolvent or go bankrupt. MMT advocates often cite Japan as a successful experiment of the MMT, because it is the economy that has the highest public debt among the OECD (Organisation of Economic Co-operation and Development) economies and experienced dramatic growth in high-powered money supply since 2013, but has low inflation, stable yen exchange rates and zero interest.

Date: 2019
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DOI: 10.1142/S1793930519000400

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