Business Cycles, Inflation and Unemployment: An MMT perspective

Abstract

Any modern economy faces the periodic tendency of fluctuations that disrupts the macroeconomic variables leading to massive downturns in economic activity- conceptualised as business cycles. This review article examines the countercyclical policies adopted by Central Banks during recessions in light of the various arguments laid out by Modern Monetary Theory (MMT). Finally, it also looks into the assumptions behind Phillips' curve and what MMT has to offer in terms of inflation targeting