The Modern Monetary Theory (MMT)

Modern Monetary Theory (MMT) is an economic framework that explains how countries with their own sovereign currencies can fund government spending primarily by creating money. It emphasizes that such governments cannot run out of money like households, as they can issue currency at will. MMT suggests that achieving full employment and economic stability depends on managing inflation and resource use, not just balancing budgets. Instead of focusing solely on deficits, it encourages policymakers to prioritize public investment and social programs, using taxation and other tools to control inflation and ensure sustainable growth.