Functional Finance and the Debt Ratio

22 Pages Posted: 4 Jan 2013  

Scott T. Fullwiler

Wartburg College; Bard College - The Levy Economics Institute

Date Written: December 29, 2012

Abstract

This post will explore at length (warning!) and in detail (another warning — wonk alert!) the MMT perspective on the debt ratio and fiscal sustainability. While the approach suggests a macroeconomic policy mix and strategies for both fiscal and monetary policies that most neoclassical economists currently believe are unsustainable, ultimately the MMT preference for a significant role for fiscal policy in macroeconomic stabilization is shown to be consistent with traditional neoclassical views on fiscal sustainability.

Keywords: debt ratio, fiscal sustainability, macroeconomic policy, national debt, functional finance

JEL Classification: E40, E43, E52, E58, E61, E62

Suggested Citation

Fullwiler, Scott T., Functional Finance and the Debt Ratio (December 29, 2012). Available at SSRN: https://ssrn.com/abstract=2196482 or http://dx.doi.org/10.2139/ssrn.2196482

Scott T. Fullwiler (Contact Author)

Wartburg College ( email )

222 Ninth St. NW
Waverly, IA 50677
United States

Bard College - The Levy Economics Institute ( email )

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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