A Literature Study On Modern Monetary Theory (Mmt): Implementation And Impact

Kenny Pradipta Montoya Putra Pratama, Ali Zainal Abidin


Modern Monetary Theory (MMT) is a contemporary economic theory in which a country with its monetary sovereignty can print as much money as needed to finance public spending without worrying about the effects of inflation or budget deficits. However, there is also criticism of MMT because it ignores the risk of inflation. This study aims to discuss further modern monetary theory (MMT) and the impact of its implementation. This study uses a qualitative approach with the literature study method by obtaining secondary data from books, journal articles, and websites related to money, taxes, full employment, inflation, and MMT, with 88 data. Data was collected from Google Scholar, Scopus, Wall Street, Forbes, New York Times, Project Syndicate, Fraser Institute, and Eureka report. This study uses content analysis through the stages of data collection, data reduction, data presentation, and conclusion. The validity of the data was tested using source triangulation. The study results show that the application of modern monetary theory (MMT) works and positively impacts the economy, especially in countries with monetary sovereignty. However, the application of MMT can also pose serious risks and negative impacts if not implemented carefully. Therefore, the government must consider various factors and risks before implementing MMT.


Keywords: Modern Monetary Theory; Money; Taxes; Deficit; Inflation


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