Archives: Terms

Definition of Monetary Economics Monetary economics is a branch of economics that studies different aspects of money, its functions, and the policies regulating its use. It closely examines how the quantity of money in an economy impacts interest rates, inflation, and economic growth. This field also evaluates the role of […]

Definition of Monetary Disequilibrium Theory Monetary Disequilibrium Theory (MDT) is an economic framework that explains fluctuations in economic activity and price levels through variations in the supply and demand for money. According to this theory, an imbalance between the amount of money available in an economy and the desire of […]

Definition of Monetary Circuit Theory Monetary Circuit Theory (MCT) focuses on the way money flows through the economy, originating from and returning to the banking sector, forming a circuit. It emphasizes the role of banks in creating money through lending and the importance of credit and debt in the economy. […]

Definition of the Modigliani–Miller Theorem The Modigliani–Miller Theorem (M&M Theorem), proposed by Franco Modigliani and Merton Miller in 1958, represents a cornerstone in modern corporate finance. At its core, the theorem asserts that, under certain market conditions and assumptions, the value of a firm is independent of its capital structure. […]

Definition of Modified Gross National Income (GNI) Modified Gross National Income (GNI) is an economic metric that adjusts the traditional Gross National Income to account for particular factors like depreciation of assets, environmental costs, or expenditures on research and development. It aims to provide a more accurate representation of a […]

Definition of Modern Portfolio Theory Modern Portfolio Theory (MPT) is a financial framework that attempts to maximize portfolio returns for a given amount of risk, or minimize risk for a given level of expected return, through careful selection and diversification of investments. Introduced by Harry Markowitz in his 1952 paper, […]

# Modern Monetary Theory (MMT) ## Definition of Modern Monetary Theory Modern Monetary Theory (MMT) is an economic framework that posits that governments, which issue their own fiat currencies, are not constrained by revenues when it comes to federal budgeting. Instead, the limitation comes from inflation. This theory suggests that […]

Definition of Mixed Economy A mixed economy is an economic system that combines elements of both capitalism and socialism. This hybrid structure allows for the coexistence of private and public ownership of the means of production. In a mixed economy, the government intervenes in market activities to achieve specific social […]

Definition of Missing Market A missing market refers to a situation where a market for a good or service does not exist, often due to the failure of market conditions to support its establishment or because externalities prevent its formation. This can occur when the benefits of a good or […]

Definition of Minsky Moment The term Minsky Moment refers to a sudden collapse of market values, particularly in the financial sector, instigated by the reckless speculative activity that inherently follows a long period of prosperity and increasing investment. Named after economist Hyman Minsky, whose work suggests that long periods of […]