Understanding Inflation

Inflation is when the prices of things go up over time. MMT has a different idea about why this happens:

The government controls the money, which means it has a lot of power over prices.

The prices we see in the economy are affected by how much the government pays for things when it spends money and what it asks for when it lends money.

In a market economy, the government only needs to set one price, and then all the other prices are decided by people buying and selling things, as well as by rules and institutions.

So, MMT believes that the government has a big role in setting absolute prices and the framework for inflation in the economy.