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MMT, Sovereign Currencies and the Eurozone.
- Source :
-
Review of Political Economy . Oct2022, Vol. 34 Issue 4, p633-646. 14p. 3 Charts. - Publication Year :
- 2022
-
Abstract
- 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]
Details
- Language :
- English
- ISSN :
- 09538259
- Volume :
- 34
- Issue :
- 4
- Database :
- Academic Search Index
- Journal :
- Review of Political Economy
- Publication Type :
- Academic Journal
- Accession number :
- 158598092
- Full Text :
- https://doi.org/10.1080/09538259.2022.2092996