A national government with the authority to tax gets to nominate a money of account along with the ‘money things’ that will be accepted in fulfillment of the tax obligations it imposes. In doing so, the government creates a demand for a particular money – a ‘state money’. This motivates the formation of markets for goods and services whose prices are denominated specifically in the money of account. This is true whether the national government with the authority to tax is a monetary sovereign (a currency issuer) or a monetary non-sovereign (a currency user), though a monetary sovereign will have greater autonomy in shaping the economy according to democratically expressed preferences as well as the werewithal to underwrite the economy....Excellent analysis of the crucial difference between the issuer of sovereign currency and users of that currency. Pass it along. This is foundational to MMT and few people, even some in banking and finance, seem to not get this distinction or forget it.
heteconomist
State Money and Markets
Peter Cooper
No comments:
Post a Comment