Modern money theory: some basics in response to Drumetz/Pfister

This article examines the misconceptions about modern money theory (MMT) put forward by Drumetz/Pfister specialIntscript The author divides her critique into three categories. First, the Drumetz/Pfister article erroneously indicates that MMT focuses exclusively on the means-of-payment function of money, that it considers money as a pure asset, that it does not distinguish between inside , outside money , that it does not distinguish between money and the monetary base. Second, Drumetz/Pfister specialIntscript falsely represent MMT as leaving monetary policy to law and as belittling the impact of quantitative easing. Drumetz/Pfister misunderstand what is meant by government debt being monetized. Third, their article puts forward the incorrect idea that increased government spending could lead to increased long-term interest rates, and that a zero interest rate could suppo-sedly bring about macroeconomic instability and inflation.