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This paper is an answer to the question: What is new, what is good and what is relevant for Eurozone countries in Modern Monetary Theory (MMT)? The answer is organized under six questions: (1) What is MMT? (2) What is the definition of a sovereign currency — an important concept for MMT authors? (3) Does the institutional setup play any role in assessing monetary sovereignty? (4) Is the euro a foreign currency for eurozone countries, that is, are eurozone countries currency users or currency issuers? (5) Why could there be a eurozone financial crisis and was it a balance-of-payment crisis, as a number of authors have claimed? (6) And as a conclusion, what is the future of the Eurozone? It is argued that MMT is part of the Institutionalist branch of post-Keynesian economics; that the current definition of a sovereign currency is insufficient; that the Eurozone crisis arose from the combination of Maastricht-like rules and the convention that the European Central Bank would not act as a purchaser of last resort; and that this crisis can only be taken to be a balance-of-payment crisis when considering that bond investors thought some countries would leave the Eurozone and face currency depreciation. [ABSTRACT FROM AUTHOR]

Connecting comparative political economy (CPE) approaches, as the Varieties of Capitalism (VoC) theory, with post-Keynesian (PK) research on different demand and growth regimes in modern capitalism has recently given rise to some interesting claims regarding differentiation and shifts of demand and growth regimes. However, we find some difficulties in the way PK approaches have been interpreted and integrated in modern CPE approaches. Therefore, we first provide a theoretically consistent and empirically applicable classification of demand and growth regimes under the conditions of finance-dominated capitalism, as it recently has been proposed by PK authors. Second, instead of using the traditional VoC dual classification, we focus on a more differentiated welfare model classification, which can be seen as different socio-institutional responses towards the challenges of globalisation and financialisation. For the period before the 2007-9 crisis, we link the PK demand and growth regimes with five socio-economic models identified by Hay and Wincott (2012), and thus provide an alternative approach. Third, going beyond the current debate, we examine the regime shifts after the 2007-9 global crisis with respect to the demand and growth regimes, and we also examine the changes within the welfare models. Whereas we find a clear pattern for the shift of demand and growth regimes, the changes in the welfare models are not as clear-cut. [ABSTRACT FROM AUTHOR]

The paper discusses the hypothesis that the functional distribution of income is not necessary stable along the growth path of a capitalist economy. We reviewed Pasinetti and Foley models showing that if we use the traditional definition of capital, i.e., capital as the value of productive resources (i) r > g is a necessary condition for the existence of balanced growth, and it will not lead to an explosive process of income concentration and (ii) r > i is a necessary condition for a financially robust growth path. Thus we conclude that from a post-Keynesian perspective, Piketty's argument that the root of the increase of inequality in capitalism is that the capital return rate is higher than the growth rate of the economy is wrong. [ABSTRACT FROM AUTHOR]