Abstract
This paper combines the concept of electronic money (no physical currency) with Modern Monetary Theory (MMT). It argues – based on an MMT understanding of macroeconomics – how electronic monetary systems offer a big step forward for macroeconomic control, among other things by giving a government new and potent steering tools. More specifically the paper discusses how one in an electronic money environment can easily curb an overheated economy primarily through control of money velocity – not money supply. This is a necessary topic to explore, even if the opposite is needed in today's global situation, to convince academics and decision makers that running necessary large and persistent government budget deficits in depressed economies, is not "irresponsible" and does not need to imply strong inflation in later economic boom situations.Real World Economic Review, no. 63
Improved macroeconomic control with electronic money and modern monetary theory
Trond Andresen | The Norwegian University of Science and Technology
The whole issue of RWER, 63 can be downloaded here.
