needs to name a new Governor of the Bank of England,
as the term of Canadian Mark Carney ends in January.
There is also mention that many from Labour's Left
wing might want someone with Modern Monetary Theory
ideas.
Looked that up in Wikipedia and found the English-language
piece ather long, but the French more short and useful.
Below, back in English with GoogleTranslate, with a few edits:
Modern monetary theory
The modern monetary theory (in English Modern Monetary Theory or Modern
Money Theory ) or neochartalisme is a theory derived from chartalism which
asserts that government can finance its expenditures through the creation of
money .
History
While the foundations of chartalism date back to the early XXth century with the
work of Georg Friedrich Knapp , its revival as neochartalism or Modern Monetary
Theory dates back to the 1990s and as these debates developed in the 2010s.
The theory was put forward from 2017 on in the democratic circles in the United
States , in particular by Stephany Kelton , economic adviser to Bernie Sanders.
Content of the theory
Modern monetary theory considers that the government can finance its
expenditures through monetary creation 2 .
Monetary creation must thus finance a deficit that ensures full employment .
It opposes the conventional theory of economic policy which considers that
monetary policy must keep inflation around a target and that fiscal policy must
reserve the fiscal solvency of the state, even at the price of full employment.
Proponents of the theory start from the observation that inflation remains low,
even in a situation of full employment. Monetary policy could therefore not lead
to growth of inflation and high interest rates 1 .
Some economists, although sees as of the left such as Paul Krugman and Larry
Summers, on the contrary consider that the financing of the deficit by a limitless
monetary creation risks leading to an inefficient allocation of savings and result
in hyperinflation . Rather, they believe that demand must be sustained and that the
state should make significant productive investments, for example in energy
transition or new strategic industries 1 . The theory has also been criticized by
the neo-Keynesian Thomas Palley (en) : a policy of making the state an "employer
of last resort" could undermine other social programs as well as the private sector
and eventually lead to higher taxes or inflation 2 , 3 .
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