RETHINKING DEVELOPMENT FINANCE IN THE LIGHT OF MODERN MONETARY THEORY

Abstract

This article discusses the challenges of financing economic development and how the Modern Monetary Theory (MMT) offers important tools for countries to overcome historical difficulties. It is shown how financialization creates problems for central countries to finance innovation, previously restricted to peripheral countries. It is argued that in sovereign money-issuing countries, the State can and should actively participate in development financing.

Keywords

• modern monetary theory
• economic development finance
• economic development