Monetary Sovereignty: Nature, Implementation, and Implications

23 Pages Posted: 7 Oct 2020

Date Written: Fall 2020


Monetary sovereignty is a central concept of Modern Money Theory (MMT). The paper explores the characteristics of monetary sovereignty, the means used to implement it, and some of its theoretical and policy implications. Herein, it is shown that monetary sovereignty involves a high degree of coordination between the central bank and the national treasury. The paper also argues that monetary sovereignty is not special to the United States, does not require direct monetary financing of the treasury, does not tell us anything about the optimal size of the fiscal balance, and is not dependent on the willingness of foreigners to hold the domestic currency.

Suggested Citation

Tymoigne, Eric, Monetary Sovereignty: Nature, Implementation, and Implications (Fall 2020). Public Budgeting & Finance, Vol. 40, Issue 3, pp. 49-71, 2020, Available at SSRN: or

Eric Tymoigne (Contact Author)

Lewis & Clark College ( email )

0615 SW Palatine Hill Road
Portland, OR 97204
United States

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