Answers to Questions 1 and 2: Financial System from Viewpoint of Payment

Yoshikiyo Sakai ()
Additional contact information
Yoshikiyo Sakai: Kanagawa University

Chapter Chapter 5 in Deflation and Fiscal Deficits, 2024, pp 39-49 from Springer

Abstract: Abstract We give answers to questions 1 and 2, which are based on the discussions of the fiscal theory of the price level (FTPL) and the modern monetary theory (MMT). Specifically, from the perspective of economics of payments by Freeman (1996), we present a model consistent with the FTPL assertion that fiscal and monetary policy are intertwined. This mechanism explains the process by which the central bank underwrites government bonds, which are the source of fiscal spending, thereby increasing the money stock and consequently affecting prices. In addition, the MMT proposition “budget deficits are national wealth” is established between the public sector and the private sector from the assumptions, (i) the government activity in which revenue is financed after spending decision is made and (ii) government bonds and the monetary base are treated identically.

Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:spbchp:978-981-97-0415-6_5

Ordering information: This item can be ordered from
http://www.springer.com/9789819704156

DOI: 10.1007/978-981-97-0415-6_5

Access Statistics for this chapter

More chapters in SpringerBriefs in Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().