I have very mixed feelings about this book.
It first gives a detailed overview of the development of the European Monetary Union from the end of the Second World War to the creation of the Euro. Sometimes it is very instructive, sometimes it is written in Eurocratic jargon as if it is a copy of official texts. It also contains more than a hundred time a reference to the so-called flawed neo-liberal doctrines, austerity and as a consequence massive unemployment.
In a second part it gives an overview of the years leading to the global financial crisis. This part is a little bit more documented through tables and graphs, but again, it has the same references to the neo-liberal economics and policies that the author clearly hates.
The third part contains an exposure of the competing theories with an exposition of Modern Money Theory. It then gives possible ways to a better federal system in Europe, ending with an argument for abandoning the euro. From this part it is clear that he doesn't understand anything about the thinking and the culture of the Europeans, which should not be a surprise for someone living thousands of miles away from Europe and clearly submerged in the Anglosaxon way of thinking about Continental Europe as a bunch of idiots and nazis. The last chapter on unemployment guarantees is one of the obsessions of Modern Money Theory and it has no place in this book on monetary problems.
I largely agree with the flawed nature of the mainstream economic theories and the arbitrary rules which govern the Eurozone (max. 3 percent government deficit and max. 60 percent government debt) and the absence of fiscal policy in general. But after reading this book, it looks MMT (Modern Money Theory) is equally flawed. Through the book a direct relationship is assumed between government spending and unemployment. The exposition on page 302 clearly proves it is flawed. It is assumed that when the private sector spends less than income, there will be unemployment, except if the government runs a deficit. For a MMT adherent, it is shocking to find out that Mitchell doesn't understand the stock-flow consistent approach! Spending less than income only has a direct impact on savings (from households) and a deficit (for firms), so on "stocks". In the next period several things can happen to the "flows", as this depends on the financing by the firms (borrowing from banks of from the households, cutting dividends, possible government transfers from households to firms) and the existence of productive investments by firms (financed by borrowing from banks). There is NO direct relationship between government deficits and unemployment, in either way. Both mainstream theory and this version of MMT rely on the flawed Quantity Theory of Money which also gives a linear relationship between money (a "stock") and growth (a "flow").
It is also a pity that MMT has transformed the very nuanced theories of Abba Lerner (functional finance) into a dogmatic policy advise on fiscal policy.
Finally, although Mitchell claims that the MMT theory is backed by empirical evidence, you will not find any reference to this evidence in the book.
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