Review by Choice Review
In much of "mainstream" economics, especially in the dynamic general equilibrium tradition of Kenneth Arrow and Gerard Debreu, monetary and financial institutions are largely irrelevant, and money itself plays no major role. To laypeople, and even to policy makers and practitioners, this is absurd. In this primer on "modern money theory," Wray (Univ. of Missouri, Kansas City) likewise is deeply skeptical and dismissive of the mainstream and attempts to present an "alternative" view of modern monetary systems and explain how money really works. He starts by laying out basic macroeconomic truths that are easily derived from national income, stock-flow identities. He goes on to study the limits to monetary policy faced by sovereign nations operating in an open economy. A good chunk of the book is devoted to studying different currency regimes and their suitability for developing nations. Much of what the author writes about should appear uncontroversial to mainstream monetary economists, but clearly he does not think so. In the end, various straw men are created and demolished, but in a good-natured way. Summing Up: Recommended. General, academic, and professional readers interested in monetary theory and macroeconomics. J. Bhattacharya Iowa State University
Copyright American Library Association, used with permission.
Review by Choice Review
