Modern monetary theory: Why real estate is fundamental to economic growth

Abstract

Individuals and businesses across the world continue to look to government for economic support through the turmoil created by the COVID-19 pandemic. Without the flow of money into the economy we would be in a far worse state than we are now. The only reason that this is possible has been because governments and central banks have been able, in many major economies, to print increasing amounts of money. They have recognised that the way government debt and corporate debt or individual debt operate are quite different. In essence, there is no such thing as government debt (in a country that controls its own supply of currency). Governments do not collect taxes in order to spend, they collect taxes to replenish the coffers once they have spent. This forward-looking approach is called modern monetary theory and the time to embrace this is now.