It’s been over 10 years since I published Understanding the Modern Monetary System, one of the most widely read papers in the SSRN research database. I published this paper because I was having trouble finding a succinct but thorough explanation of money and macroeconomics during the financial crisis. Further, many of the mainstream explanations of concepts like QE, banking, inflation and money appeared outdated at best and wrong at worst. Since then most of the concepts in this paper have been adopted by the mainstream or updated to account for the concepts. I am extremely proud of how well this paper has held up over time, but it needed some updating.
We’ve added sections on inflation, monetary policy, cryptocurrency and much more. It’s cleaner, even more succinct, less narrative and more empirically driven. I hope you learn a lot from it.