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2021 | OriginalPaper | Chapter

11. Modern Monetary Theory and COVID-19 Crisis

Author : Tihomir Domazet

Published in: Macroeconomic Responses to the COVID-19 Pandemic

Publisher: Springer International Publishing

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Abstract

Modern Monetary Theory (MMT) is part of post-Keynesian economics that summarize the money creation process as “loans create deposits” (banks) and “deposits create reserves” (central bank). MMT is distinguished from other approaches to macroeconomics because it synthesizes several traditions from heterodox economics focusing on describing monetary and fiscal operations in nations that issue a sovereign currency. The shift in interest pre-dates the COVID-19 crisis, but the virus has given MMT a huge boost—the world is on a crossroad that leads to a conclusion that exit strategy to the new global economics system is to be based on MMT.

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Title: Modern Monetary Theory and COVID-19 Crisis
Author: Tihomir Domazet
Publisher: Springer International Publishing
Book: Macroeconomic Responses to the COVID-19 Pandemic
Print ISBN: 978-3-030-75443-3

Electronic ISBN: 978-3-030-75444-0

Copyright Year: 2021
DOI: https://doi.org/10.1007/978-3-030-75444-0_11