Abstract
Subject Modern monetary theory. Significance Over the past year, academia and policymakers have devoted much attention to a new school of economic thinking, modern monetary theory (MMT). According to this, governments could -- and should -- spend as much as they can to achieve full employment. Governments can print money to finance this as they own the monopoly over currency and do not need revenues to finance such expenditure as states cannot go bankrupt. Impacts US presidential candidates could advocate MMT to promise high spending with no deleterious economic effects. MMT will tempt governments as it promises that they can finance large fiscal deficits cheaply. According to MMT, public deficits cannot be compared to private-sector budgets and have more flexibility to expand.
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