Inflation and Sovereign Currencies

Abstract

In this chapter we will examine the MMT view of inflation and hyperinflation. The usual belief is that budget deficits and full employment are prone to cause inflation, if not hyperinflation. Many critics even argue that following MMT is necessarily inflationary — the path to ruin. Let us first see how inflation is defined. We then turn to hyperinflation, to fears that Quantitative Easing might spark inflation, and finally to MMT’s views on policy to promote price stability.