In this innovative and very practical book, Randall Wray argues that full employment and price stability are not the incompatible goals that current economic theory and policy assume. Indeed, he advances a policy that would generate true, full employment while simultaneously ensuring an even greater degree of price stability than has been achieved in the 1990s.
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Editorial Reviews
Review
'An important book, one that should begin a new discussion of full employment and price stability. (Wray) shows that the basic presumptions of mainstream macroeconomics were and are flawed.... Both the analysis and the policy proposals in this book deserve wide dissemination. It is time for a new approach to these questions, and this book opens the door to new ways of thinking.' -- Ed Nell, New School for Social Research
'Extremely well written and persuasively argued.... it turns economics from a dismal science into a positive science, capable of clear policy recommendations that cut the gordian knot of the unemployment-inflation tradeoff.' -- Jan Kregel, Universita degli Studi di Bologna, Italy
'In this innovative new work, Randy Wray has convinced at least one reader that full employment and price stability are fully compatible goals in today's world....Pivoting on his fresh rereading of the history and nature of money, Wray generates insight after insight, and will change forever the way in which we think about key macroeconomic variables and relationships.' -- John Adams, Northeastern University
'Understanding Modern Money breathes a whiff of fresh air over the desert of unimaginative, and only too often irrelevant though lofty sophisticated technicalities, in which macroeconomic writing has landed us in the last decades.' -- Y.S. Brenner, University of Utrecht, The Netherlands
... accomplishes a difficult task indeed, managing to offer both a critique of key mainstream macroeconomic views and a plausible alternative. -- - Teodoro Dario Togati, The Economic Journal --This text refers to an out of print or unavailable edition of this title.
'Extremely well written and persuasively argued.... it turns economics from a dismal science into a positive science, capable of clear policy recommendations that cut the gordian knot of the unemployment-inflation tradeoff.' -- Jan Kregel, Universita degli Studi di Bologna, Italy
'In this innovative new work, Randy Wray has convinced at least one reader that full employment and price stability are fully compatible goals in today's world....Pivoting on his fresh rereading of the history and nature of money, Wray generates insight after insight, and will change forever the way in which we think about key macroeconomic variables and relationships.' -- John Adams, Northeastern University
'Understanding Modern Money breathes a whiff of fresh air over the desert of unimaginative, and only too often irrelevant though lofty sophisticated technicalities, in which macroeconomic writing has landed us in the last decades.' -- Y.S. Brenner, University of Utrecht, The Netherlands
... accomplishes a difficult task indeed, managing to offer both a critique of key mainstream macroeconomic views and a plausible alternative. -- - Teodoro Dario Togati, The Economic Journal --This text refers to an out of print or unavailable edition of this title.
About the Author
L. Randall Wray, Professor of Economics and Research Director, Center for Full Employment and Price Stability, University of Missouri â€" Kansas City, US
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Customer Reviews
Most Helpful Customer Reviews
11 of 11 people found the following review helpful
By Alex
Format:Paperback|Amazon Verified Purchase
Quite simply, the book is an important read given current economic debates ( government deficits and debt etc) and is very good.
Following a brief introduction, the book contains a few chapters on the history of money. This part of the book, while perhaps important for an academic, is boring, irrelevant, and in my opinion, too philosophical for a general reader. There are many quotes from Keynes and Smith in the drawn out chapter(s), and to be honest, they are difficult for an ordinary reader to understand. I ended up skipping to the end of the "history of money" chapter once I was halfway through it - and I still don't regret doing so.
Apart from that, providing you have some basic knowledge of monetary operations and reserve accounting, he book is fantastic . It clearly explains the operational realities of government spending, the issue of government securities, bank lending and so on.
The question remains: Why does this book deserve five stars if part of it wasn't worth reading, and part was fantastic?
Answer: Because this book answers the fundamental economic questions that no other book answers. Many other economic books are based on "The US is screwed - lots of debt, hyperinflation, aging population, China etc" - these type of books best resemble propaganda, and are ignorant the operational realities of the monetary system. Understanding Modern Money couldn't be more different - it is a beginner to intermediate or above guide to the fundamentals of monetary economics. It answers the big questions such as:
Will a USA government check bounce? Can the USA operationally default?
Why does the federal government issue Treasury securities? How does this affect the overnight interbank lending rate? Will the market drive up interest rates?
Where do you get the "money" to pay your taxes from? Why isn't there a society with its own currency, no taxes and no government spending?
Furthermore, it answers these questions in different style to more mainstream books. A mainstream book would answer the first question by going into depth about the debt/GDP ratio, interest rates, demographics, consumers propensity to save and so on. On the other hand, Understanding Modern Money simply explains why the USA can not operationally default (it can only default because of political incompetence) regardless of how much it spends or China's desire to buy Treasury securities. It explains that there is no such thing as the USA "running out of money", regardless of demographics, interest rates, debt/GDP ratios, S&P downgrades and so on. Yes, inflation is a potential problem, and Wray acknowledges that - but solvency or "bouncing checks" are not problem's.
As you can see, Understanding Modern Money gets to the heart of modern economics - the operation realities of the monetary system and reserve accounting.
Following a brief introduction, the book contains a few chapters on the history of money. This part of the book, while perhaps important for an academic, is boring, irrelevant, and in my opinion, too philosophical for a general reader. There are many quotes from Keynes and Smith in the drawn out chapter(s), and to be honest, they are difficult for an ordinary reader to understand. I ended up skipping to the end of the "history of money" chapter once I was halfway through it - and I still don't regret doing so.
Apart from that, providing you have some basic knowledge of monetary operations and reserve accounting, he book is fantastic . It clearly explains the operational realities of government spending, the issue of government securities, bank lending and so on.
The question remains: Why does this book deserve five stars if part of it wasn't worth reading, and part was fantastic?
Answer: Because this book answers the fundamental economic questions that no other book answers. Many other economic books are based on "The US is screwed - lots of debt, hyperinflation, aging population, China etc" - these type of books best resemble propaganda, and are ignorant the operational realities of the monetary system. Understanding Modern Money couldn't be more different - it is a beginner to intermediate or above guide to the fundamentals of monetary economics. It answers the big questions such as:
Will a USA government check bounce? Can the USA operationally default?
Why does the federal government issue Treasury securities? How does this affect the overnight interbank lending rate? Will the market drive up interest rates?
Where do you get the "money" to pay your taxes from? Why isn't there a society with its own currency, no taxes and no government spending?
Furthermore, it answers these questions in different style to more mainstream books. A mainstream book would answer the first question by going into depth about the debt/GDP ratio, interest rates, demographics, consumers propensity to save and so on. On the other hand, Understanding Modern Money simply explains why the USA can not operationally default (it can only default because of political incompetence) regardless of how much it spends or China's desire to buy Treasury securities. It explains that there is no such thing as the USA "running out of money", regardless of demographics, interest rates, debt/GDP ratios, S&P downgrades and so on. Yes, inflation is a potential problem, and Wray acknowledges that - but solvency or "bouncing checks" are not problem's.
As you can see, Understanding Modern Money gets to the heart of modern economics - the operation realities of the monetary system and reserve accounting.
15 of 18 people found the following review helpful
Format:Hardcover
Wray makes the the concepts of the chartalist theory of money, functional finance, and employer of last resort understandable and interesting to even someone with no prior knowledge of the issues.
12 of 14 people found the following review helpful
Format:Paperback|Amazon Verified Purchase
I'm an MBA from a "Top 10" school and this book has completely changed my thinking on the monetary system and the macro economy. Wray clearly and concisely explains modern fiat currency and why a government that issues its own fiat currency can never be finance constrained. He also ties money to the real economy and discusses how to maintain price stability and full employment. Highly recommended.
Most Recent Customer Reviews
5.0 out of 5 stars
Household Budget Analogy does not Apply to the Federal Government
Read Wray's Blog at New Economic Perspectives.. Very helpful/aid to grasping MMT.
Basic concepts which have totally changed my thinking how the Federal Government... Read more
Basic concepts which have totally changed my thinking how the Federal Government... Read more
Published 11 months ago by J. Gwinn
3.0 out of 5 stars
Ultimately unconvincing
Understanding Modern Money presents the essentials of an alternative to current economic theory, Modern Monetary Theory (MMT), also termed "chartalism". Read more
Published 11 months ago by tgw
5.0 out of 5 stars
Everything now makes sense
I have a BS in Economics and 33 years experience trading fixed income securities for a living. I read this book in a weekend after going through everything posted on the MMT... Read more
Published 12 months ago by gc
5.0 out of 5 stars
One of the best MMT Primers
For those in the early stages of being introduced to Modern Monetary Theory, you can't do much better than this book. Read more
Published 15 months ago by Liberty4all
5.0 out of 5 stars
The one the only
If your looking for the truth about the way the economy actually works, look no further. All the social problems and economic lies are summed up in this book and systematically... Read more
Published 17 months ago by oliver dreher
5.0 out of 5 stars
History of money and explanation of fiat money system
This is a priceless book. The history of money was extremely interesting. The explanation of how modern fiat money works was in depth and very thorough. Read more
Published 20 months ago by Siena
5.0 out of 5 stars
Excellent book
This book explains in simple words how our monetary system works.
You need to know the simple basics of economy; if you know how the fractionary reserve system works, you will... Read more
You need to know the simple basics of economy; if you know how the fractionary reserve system works, you will... Read more
Published on May 9, 2011 by Iacopo Simonelli
5.0 out of 5 stars
Important Book
This powerful text is my most valuable. It should be required reading for every macroeconomics 101 class. Read more
Published on July 23, 2010 by John Williams
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