Chapter 3: Sovereign nations face resource constraints, not financial constraints
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We begin with an overview of the foundations of MMT, demonstrating that the issue facing sovereign nations is not the availability of finance. This is true for all countries that meet our definition of sovereign currency issuer. We respond to the claim of many critics that MMT can only apply to countries that issue one of the major international reserve currencies. We then turn to the issue of resource constraints - which are faced by sovereign currency issuers whether they are developed or developing countries. Many of our critics have mistaken resource constraints for financial constraints. What small developing countries face are much more binding constraints on access to external resources. What MMT offers to them is an understanding of their ability to mobilize domestic resources, which can help to substitute for, and to lessen, external resource constraints.

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