Origins of MMT
1. Origins of Modern Monetary Theory (MMT): Mosler came up with modern monetary theory, which is related to school of thought from the past, such as functional finance and chartalism. Mosler first thought about some of the ideas that make up the theory when he was a trader on Wall Street in the 1970s. He used his ideas to make some smart bets at the hedge fund he started in the end. Investors were scared that Italy would not pay its debts in the early 1990s, but Mosler knew that this wasn’t likely to happen. It was his company and its clients who held the most Italian lira-denominated bonds outside of Italy. Italy did not go bankrupt; instead, they made $100 million.
2. Challenges in Academic Reception of MMT: Mosler, who has a B.A. in economics from the University of Connecticut, had a hard time getting his ideas across to people in academia. He wrote an important article in 1993 called “Soft Currency Economics” and shared it on a post-Keynesian listserv, where he met people who agreed with him, such as the Australian economist Bill Mitchell.
3. MMT’s Rise in Popularity through the Internet: Many people became interested in MMT because of the internet. Economists wrote about it on popular personal and group blogs, the idea of a trillion-dollar coin was talked about a lot, and supporters shared a video of Alan Greenspan, the former chairman of the Federal Reserve, saying that pay-as-you-go benefits are safe because “there’s nothing stopping the federal government from creating as much money as it wants and paying it to somebody. Bernie Sanders and Alexandria Ocasio-Cortez are two politicians who support MMT. During Sanders’ 2016 presidential campaign, Stephanie Kelton was his top economic adviser. It was Kelton who first heard about Mosler’s ideas on a listserv and is now considered the face of the theory.