Abstract: There is a niche yet popular view that Modern Monetary Theory (MMT) is an effective theory for guiding macroeconomic policy, and China should also implement similar policies backed by MMT. While some monetary policy tools indeed possess (quasi-) fiscal features, the foundation for implementing MMT at scale does not exist. First, this paper attempts to illustrate that MMT is a wrong theory. Then, it explains the reasons why the United States has not implemented policies based on MMT. Lastly, the paper argues from a practical standpoint that policies derived from MMT are not good policies and there are far better policy options available than those offered by MMT.
