This second edition explores how money 'works' in the modern economy and synthesises the key principles of Modern Money Theory, exploring macro accounting, currency regimes and exchange rates in both the USA and developing nations.

In this illuminating book, Randall Wray explores the origins, nature, and evolution of money, emphasizing the critical role played by both credit and state money in capitalism. Integrating and updating the influential theories presented in Wray's previous books, Money and Credit in Capitalist Economies and Understanding Modern Money, this new book addresses key questions in modern economic theory and policy. Wray adopts the monetary theory of production shared by the three principle heterodox traditions, Marxism, Institutionalism and Keynesianism to highlight the role played by money in the capitalist system. He applies Keynes's liquidity preference theory and Marx's labor theory of value to examine the determinants of the value of money and uncover the systemic properties driving capitalist production. He provides insights into the vital role of the state in the development and regulation of the modern monetary system. Finally, he identifies how monetary and fiscal policy can be improved to mitigate future challenges and promote economic, social and environmental sustainability. Students and scholars of heterodox approaches to economic theory, the endogenous approach to money and banking, and fiscal and monetary policy will greatly benefit from this valuable book. It is also a vital resource for academics studying the social sciences, such as sociology, political science and anthropology.

This groundbreaking new core textbook encourages students to take a more critical approach to the prevalent assumptions around the subject of macroeconomics, by comparing and contrasting heterodox and orthodox approaches to theory and policy. The first such textbook to develop a heterodox model from the ground up, it is based on the principles of Modern Monetary Theory (MMT) as derived from the theories of Keynes, Kalecki, Veblen, Marx, and Minsky, amongst others. The internationally-respected author team offer appropriate fiscal and monetary policy recommendations, explaining how the poor economic performance of most of the wealthy capitalist countries over recent decades could have been avoided, and delivering a well-reasoned practical and philosophical argument for the heterodox MMT approach being advocated. The book is suitable for both introductory and intermediate courses, offering a thorough overview of the basics, while covering everything needed for more advanced courses. Issues are explained conceptually, with the more technical, mathematical material in chapter appendices, offering greater flexibility of lecturer use. Key features include; Pluralistic coverage of macro thought, with both mainstream neoclassical principles and the MMT alternative defined and discussed in detail, offering students a critical analysis of the subject. Valuable historical context is provided, showing the evolution of macroeconomics as a discipline, and the emergence and divergence of its different schools. A focus on the realities of how money and banks operate, and on applied theories of financial instability, combined to give an unrivalled real-world insight into how the economy actually works. Truly global approach and perspective, with a high-profile author team drawn from the US and Australia. Companion website offers additional resources including an instructor’s manual, worked examples, tutorial questions, and additional references.

By showing that the basic assumptions if mainstream macroeconomics were and are flawed, the author aims to convince the reader that full employment and price stability are fully compatible goals in the modern world.

Is money precious and scarce, necessitating iron fiscal discipline? Must the government always balance the books or risk ruin? Or is money, in fact, a flexible tool that can be used to mobilize our collective resources to serve those who need them? In this book, leading Modern Money Theory (MMT) advocate Randy Wray explains that the only real constraints on public policy are physical resources, technological capacity and political will: but never money. He shows how modern sovereign governments spend by keystroking money to bank accounts. While taxes serve other important purposes, they do not – contrary to popular belief – fund spending. If we recognize this, and totally reframe how we think about money and debt, we can marshal our national wealth to make us all richer, eliminate unemployment and “look after our own.” We can make money work for us – the US. This book's account shows how MMT can become a new American political and economic orthodoxy, replacing the dominant conservative framework forever. It is essential reading for all progressives.

Perhaps no economist was more vindicated by the global financial crisis than Hyman P. Minsky (1919–96). Although a handful of economists raised alarms as early as 2000, Minsky's warnings began a half-century earlier, with writings that set out a compelling theory of financial instability. Yet even today he remains largely outside mainstream economics; few people have a good grasp of his writings, and fewer still understand their full importance. Why Minsky Matters makes the maverick economist’s critically valuable insights accessible to general readers for the first time. L. Randall Wray shows that by understanding Minsky we will not only see the next crisis coming but we might be able to act quickly enough to prevent it. As Wray explains, Minsky’s most important idea is that "stability is destabilizing": to the degree that the economy achieves what looks to be robust and stable growth, it is setting up the conditions in which a crash becomes ever more likely. Before the financial crisis, mainstream economists pointed to much evidence that the economy was more stable, but their predictions were completely wrong because they disregarded Minsky’s insight. Wray also introduces Minsky’s significant work on money and banking, poverty and unemployment, and the evolution of capitalism, as well as his proposals for reforming the financial system and promoting economic stability. A much-needed introduction to an economist whose ideas are more relevant than ever, Why Minsky Matters is essential reading for anyone who wants to understand why economic crises are becoming more frequent and severe—and what we can do about it.

This widely acclaimed book argues that money is not the product of a simple deposit multiplier process. The impressive analysis includes discussions of the origins and nature of money and of the evolution of monetary institutions and theory. Unlike other recent works on 'endogenous money', this book incorporates liquidity preference theory within the analysis by carefully distinguishing money from liquidity and by showing how money, but not liquidity, is created on demand. This naturally leads to a role for liquidity preference in the determination of interest rates. Extensions then link money to financial instability, the expenditure multiplier, credit, saving, investment, development, deficits and growth. This controversial and provocative book will be essential reading for all economists and researchers concerned with monetary and macroeconomics. It will have particular appeal to post Keynesian economists.

Is money precious and scarce, necessitating iron fiscal discipline? Must the government always balance the books or risk ruin? Or is money, in fact, a flexible tool that can be used to mobilize our collective resources to serve those who need them? In this book, leading Modern Money Theory (MMT) advocate Randy Wray explains that the only real constraints on public policy are physical resources, technological capacity and political will: but never money. He shows how modern sovereign governments spend by keystroking money to bank accounts. While taxes serve other important purposes, they do not – contrary to popular belief – fund spending. If we recognize this, and totally reframe how we think about money and debt, we can marshal our national wealth to make us all richer, eliminate unemployment and “look after our own.” We can make money work for us – the US. This book's account shows how MMT can become a new American political and economic orthodoxy, replacing the dominant conservative framework forever. It is essential reading for all progressives.

Money is mysterious. We love it, we hate it, but few people can tell you what the heck it really is. Wouldn't it be good to get out of the fog? This book will help you understand both the way money works and how to leverage its power. The authors take you on an illuminating journey from your piggy bank to the Federal Reserve with no pesky jargon or complex math. Once you see money clearly, life will never be the same. You'll know what really goes on in banks and what the cash in your wallet represents. You'll know how government really spends and why it can’t run out of money. You'll know what money can actually do — and how we can make it work for us.

Modern Monetary Theory and Practice: An Introductory Text is an introductory textbook for university-level macroeconomics students. It is based on the principles of Modern Monetary Theory (MMT) and includes the following detailed chapters:Chapter 1: IntroductionChapter 2: How to Think and Do MacroeconomicsChapter 3: A Brief Overview of the Economic History and the Rise of CapitalismChapter 4: The System of National Income and Product AccountsChapter 5: Sectoral Accounting and the Flow of FundsChapter 6: Introduction to Sovereign Currency: The Government and its MoneyChapter 7: The Real Expenditure ModelChapter 8: Introduction to Aggregate SupplyChapter 9: Labour Market Concepts and MeasurementChapter 10: Money and BankingChapter 11: Unemployment and InflationChapter 12: Full Employment PolicyChapter 13: Introduction to Monetary and Fiscal Policy OperationsChapter 14: Fiscal Policy in Sovereign nationsChapter 15: Monetary Policy in Sovereign NationsIt is intended as an introductory course in macroeconomics and the narrative is accessible to students of all backgrounds. All mathematical and advanced material appears in separate Appendices.