Abstract: According to Modern Monetary Theory (MMT), the only constraint on public spending for a currency issuing authority like the United States government is inflation. This paper develops an alternative understanding and analysis of economic inflation through the lens of MMT in the aftermath of the Covid-19 public health crisis and consequential economic shutdown and reopening. It argues that conventional explanations of inflation remain ideologically constricted to an outdated social theory and conceptual framing. As such, public policy responses to contemporary price increases are limited in scope and incapable of neither effectively stabilizing prices nor avoiding the worsening of social inequities and harm. The paper will first develop MMT’s insights about inflationary pressures as a theory of qualitatively determined resource use, costs, and political coordination, as opposed to a collapse in the value of money from excessive public spending. An analysis of price pressures throughout 2021 is then provided by examining supply chains, industry specific shocks, and market power. Lastly, inflation is explored in the context of an ongoing planetary climate and environmental crisis with deep implications about the future of sustainability, economic development, and price stability.
Keywords: money, neochartalism, Modern Monetary Theory, heterodox economics, Green New Deal, inflation, critical theory, social theory, accounting, critical management studies, supply chains, geopolitics, climate change, biophysical resources, ecological economics, sustainability, law, governance, public finance, fiscal, monetary, coordination, public administration
JEL codes: A1, B0, B1, B2, B3, B4, B5, D2, D4, E0, E2, E3, E4, E5, E6, F3, F5, F6, G2, G3, H0, H6, K0, Z1