Understanding Modern Money: The Key to Full Employment and Price Stability

Wray's argument incorporates incisive historical analysis, modern monetary theory and an examination of policy alternatives that rises above the doctrinal debates among monetarists, supply-siders and Keynesians over natural or non-inflationary rates of unemployment. Understanding Modern Money proclaims that a labour buffer stock programme would guarantee full employment and increase labour productivity and economic growth, while reducing inflationary pressures. Wray's analysis shows that, contrary to popular belief, the dangers of a government budget deficit are largely imaginary. He outlines a programme in which the government acts as employer of last resort, thereby providing employment and training to the otherwise unemployed, and stabilizing the wage scale which acts as a brake on inflation. This permits greater price stability without requiring conventional methods such as wage and price controls or countercyclical monetary policy.