Modern Monetary Theory from a Monetarist Angle

11 Pages Posted: 13 Jun 2019

Date Written: May 30, 2019


This paper presents an alternative presentation of Modern Monetary Theory (MMT). The main thesis of this paper is that when a nation has monetary sovereignty and fiat currency, government is quite flexible its methods in controlling price level through market mechanisms, as Warren Mosler - one of the founders of MMT - often states. The reason given, however, differs from typical MMT or chartalist accounts and comes more from a traditional monetarist origin. This somewhat monetarist approach allows avoiding controversies actual institutional details of monetary systems. Job guarantee come as a natural extrapolation of controls on prices - price of labor and also as the most direct price level mechanism. MMT is not incompatible with mainstream economics, though MMT does ask us to consider policy tools that mainstream economics has not utilized fully.

Keywords: modern monetary theory, theory of price level, New Keynesian economics, monetary economics, monetarism

JEL Classification: E41, E42, E43, E51, E52, E58, E61, E62, E63, E64

Suggested Citation

Heartspring, William, Modern Monetary Theory from a Monetarist Angle (May 30, 2019). Available at SSRN: or

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