Modern monetary theory (MMT) represents a big departure from conventional economic thinking, and its relevance and merit therefore remain hugely controversial.
MMT has its roots in Georg Friedrich Knapp’s theory of ‘chartalism’, originally published in 1905, arguing that, post-gold standard, fiat money is closer to a ‘creature of law’ than a commodity. MMT has been built upon by many economic theorists since and is often described as post-Keynesian economic theory generally advocating government intervention during recessions and depressions, and also been seen as a compliment to monetary circuit theory, which regards money as an endogenous creation of banks. It wasn't until 2019 that the first textbook on the subject was published.
What is modern monetary theory?
Can it help soften the inevitable post-pandemic economic downturn?
Is it valuable to economies that have been failed by austerity in the past?