What to Do with Modern Money Theory (MMT)?

This chapter delves into the transformative potential of Modern Monetary Theory (MMT) in the wake of the COVID-19 pandemic. It argues that the pandemic has forced policy makers to rethink traditional economic policies, leading to an increased focus on government spending to support workers and businesses. MMT provides a framework for understanding these policies, emphasizing the role of the state and the limitations of monetary policy. The chapter explores how MMT challenges conventional wisdom about public debt, fiscal sustainability, and the role of central banks. It also discusses the potential applications of MMT in addressing real-world problems, such as climate change and economic inequality. By offering a new lens through which to view economic policy, MMT has the potential to reshape the way we think about money, government spending, and the role of the state in the economy.