The first part of this short two-part series addressed an article by John Kay in the Financial Times in which he characterizes Modern Monetary Theory and the chartal explanation of state money on which it is partially based as a crank theory. In fact, as Pavlina Tcherneva documents in an interesting book chapter on the subject, the chartal or tax basis of money is not only recognized by Modern Monetary Theorists but, in the history of economic thought, by such notables as Keynes, Say, Mill and Adam Smith.
Daily Archives: 8 February 2012
Financial Times on MMT – Part 1
There is an article in the Financial Times by John Kay who in attempting to disprove the chartalist explanation of state money by example gives an illustration fully consistent with it. The article is entitled “Money, like hat-wearing, depends on convention, not laws“. The article is behind a paywall.