Modern money theory: a primer on macroeconomics for sovereign monetary systems

In recent years a new approach to macroeconomics has been developed that challenges conventional wisdom and uncovers how money 'works' in the modern economy. This book synthesises the key principles of Modern Money Theory, exploring macro accounting, currency regimes and exchange rates in both the USA and developing nations. Randall Wray addresses the pressing issues of how misunderstandings about the nature of money have caused the current global financial meltdown, and provides fresh ideas about how policymakers around the world should address the continued weaknesses in their economies

1.4 Government budget deficits are largely nondiscretionary: the case of the Great Recession of 2007 -- 1.5 Accounting for real versus financial (or nominal) -- 1.6 Recent US sectoral balances: Goldilocks and the global crash -- 2 Spending by Issuer of Domestic Currency -- 2.1 What is a sovereign currency? -- 2.2 What backs up currency and why would anyone accept it? -- 2.3 Taxes drive money -- 2.4 What if the population refuses to accept the domestic currency? -- 2.5 Record keeping in the money of account

Intro -- Contents -- List of Figures -- Chapter 1: The Basics of Macroeconomic Accounting -- 1.1 The Basics of Accounting for Stocks and Flows -- 1.1.1 One's Financial Asset Is Another's Financial Liability -- 1.1.2 Inside Wealth Versus Outside Wealth -- 1.1.3 A Note on Nonfinancial Wealth (Real Assets) -- 1.1.4 Net Private Financial Wealth Equals Public Debt -- 1.1.5 Rest of World Debts Are Domestic Financial Assets -- 1.1.6 A Note on the Importance of Inside Assets -- 1.1.7 Basics of Sectoral Accounting, Relations to Stock and Flow Concepts -- 1.1.8 Another Note on Real Assets -- 1.1.9 Conclusion: One Sector's Deficit Equals Another's Surplus -- 1.2 MMT, Sectoral Balances, and Behavior -- 1.2.1 Deficits→Savings and Debts→Wealth -- 1.2.2 Conclusion -- 1.3 Stocks, Flows, and Balance Sheet: A Bathtub Analogy -- 1.4 Government Budget Deficits Are Largely Nondiscretionary: The Cases of the Great Recession of 2007 and the COVID-19 Pandemic -- 1.5 The Wray Curve: Two Paths to Deficits -- 1.6 Accounting for Real Versus Financial (or Nominal) -- Chapter 2: Spending by Issuer of Domestic Currency -- 2.1 What Is a Sovereign Currency? -- 2.1.1 Domestic Currency -- 2.1.2 One Nation, One Currency (and Exceptions to the Rule) -- 2.1.3 Sovereignty and the Currency -- 2.2 What Backs Up Currency and Why Would Anyone Accept It? -- 2.2.1 Do Reserves of Metal or Foreign Exchange Back the Currency? -- 2.2.2 Legal Tender Laws -- 2.3 Taxes Drive Money -- 2.3.1 Sovereignty and Taxes -- 2.3.2 What Does Government Promise? What Does a Government IOU Owe You? -- 2.3.3 Conclusion: Taxes Drive Money -- 2.4 What If the Population Refuses to Accept the Domestic Currency? -- 2.5 Record Keeping in the Money of Account -- 2.5.1 Stocks and Flows Are Denominated in the National Money of Account -- 2.5.2 The Financial System as Electronic Scoreboard.