modern-monetary-theory Models

These models and simulations have been tagged “modern-monetary-theory”.

  This model
shows the basic functioning and dynamics of a 'modern monetary system'.  The non-government
sectors, consisting of the private and foreign sectors initial y starts with
zero currency units. It is important to realize that  after creating a new currency the government
must first spend cu

This model shows the basic functioning and dynamics of a 'modern monetary system'.

The non-government sectors, consisting of the private and foreign sectors initial y starts with zero currency units. It is important to realize that  after creating a new currency the government must first spend currency units into the economy before they can be used: without currency units the private sector could not even pay taxes! A government that has its own freely floating currency can create a much money as it wants. It does not need tax receipts to finance its spending, and any money it spends into the economy above that collected in taxes represents income for the private sector. The model show that the government initially created 9 trillion money units, but spent only six trillion into the economy. The six trillion showed up as a government deficit, but also as wealth in the non-government sector.

Since the government can create as many money units as it wishes and transfer  them  to the private sector  to ensure an adequate level of demand in the in the economy,  austerity is unnecessary: money is available, though real resource may be scarce. This also shows that the government can contribute actively towards the creation of prosperity. 

Please note that this model was originally created by Gene Bellinger, IM 3206, from which this version was  cloned.


This is a simplification of the Austerity vs Prosperity model in the hope that it will be easier to understand. @ LinkedIn ,  Twitter ,  YouTube
This is a simplification of the Austerity vs Prosperity model in the hope that it will be easier to understand.
This is a simplification of the Austerity vs Prosperity model in the hope that it will be easier to understand.
This is a simplification of the Austerity vs Prosperity model in the hope that it will be easier to understand.
  This model
shows the basic functioning and dynamics of a 'modern monetary system'.  The non-government
sectors, consisting of the private and foreign sectors initial y starts with
zero currency units. It is important to realize that  after creating a new currency the government
must first spend cu

This model shows the basic functioning and dynamics of a 'modern monetary system'.

The non-government sectors, consisting of the private and foreign sectors initial y starts with zero currency units. It is important to realize that  after creating a new currency the government must first spend currency units into the economy before they can be used: without currency units the private sector could not even pay taxes! A government that has its own freely floating currency can create a much money as it wants. It does not need tax receipts to finance its spending, and any money it spends into the economy above that collected in taxes represents income for the private sector. The model show that the government initially created 9 trillion money units, but spent only six trillion into the economy. The six trillion showed up as a government deficit but as wealth in the non-government sector.

Since the government can create as many money units as it wishes and transfer  them  to the private sector  to ensure an adequate level of demand in the in the economy,  austerity is unnecessary: money is available, though real resource may be scarce. This also shows that the government can contribute actively towards the creation of prosperity. 

Please note that this model was originally created by Gene Bellinger, IM 3206, from which this version was  cloned.


 MODERN MONETARY THEORY SHOWS HOW FULL EMPLOYMENT CAN BE ACHIEVED!  POTENTIAL GDP is a level of overall spending - by the government and the non-government sector - at which there is full employment. If the economy is not operating at
its potential, then the  private sector
has failed to invested or

MODERN MONETARY THEORY SHOWS HOW FULL EMPLOYMENT CAN BE ACHIEVED!

POTENTIAL GDP is a level of overall spending - by the government and the non-government sector - at which there is full employment. If the economy is not operating at its potential, then the  private sector has failed to invested or spend enough to generate the necessary growth nor has income  from net exports contributed enough. This only leaves the government to close the spending gap. Conceptually, a government disposing of its own freely floating currency could act using two powerful tools -  spending in excess of tax revenue, and taxation - to ensure that the gap between the actual economic activity and potential GDP is quickly closed. Achieving the  full employment that prevailed for 30 years between 1945 and 1975 in western economies is definitely possible!