Monetary Reform As Incremental Innovation?
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The Need for Monetary Reform
AMERICAN MONETARY INSTITUTE PO BOX 601, VALATIE, NY 12184 Tel. 518-392-5387, email [email protected] http://www.monetary.org Dedicated to the independent study of monetary history, theory, and reform “Over time, whoever controls the money system controls the society.” Stephen Zarlenga, Director The Need for Monetary Reform Monetary reform is the crucial missing element needed to move humanity away from a future dominated by fraud, warfare, and ugliness toward a world of justice, sustainability and beauty. The power to create money is an awesome power - at times stronger than the Executive, Legislative and Judicial powers combined. It’s the nation’s “magic checkbook,” where checks can’t bounce. When controlled privately it can be used to gain riches. More importantly, it determines the direction of society by controlling where the money goes – what gets funded and what does not. Will it be used to build and repair vital infrastructure - as Levees to protect major cities? Or will it go into real estate speculation, creating the real estate bubble? Will it fund sustainable industries with good jobs or go into Wall Street fueling stock market bubbles? Will it be channeled into warfare, leaving a trail of death, destruction and inflation? Thus the money issuing power should never be alienated from democratically elected government and placed ambiguously into private hands as it is in America in the Federal Reserve System today. In fact, the bulk of our money supply isn’t created by our government, but by private banks when they make loans. Through the Fed’s fractional reserve process what we use for money is issued as interest-bearing debt. -
Structural Reforms and the Exchange Rate Regime: a Panel Analysis for the World Versus OECD Countries
IZA DP No. 1798 Structural Reforms and the Exchange Rate Regime: A Panel Analysis for the World versus OECD Countries Ansgar Belke Bernhard Herz Lukas Vogel DISCUSSION PAPER SERIES DISCUSSION PAPER October 2005 Forschungsinstitut zur Zukunft der Arbeit Institute for the Study of Labor Structural Reforms and the Exchange Rate Regime: A Panel Analysis for the World versus OECD Countries Ansgar Belke University of Hohenheim and IZA Bonn Bernhard Herz University of Bayreuth Lukas Vogel University of Bayreuth Discussion Paper No. 1798 October 2005 IZA P.O. Box 7240 53072 Bonn Germany Phone: +49-228-3894-0 Fax: +49-228-3894-180 Email: [email protected] Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit company supported by Deutsche Post World Net. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. -
Abstract Introduction
A response to critiques of “full reserve banking” Ben Dyson, Graham Hodgson and Frank van Lerven1 June 2016 Cambridge Journal of Economics Abstract In this response to critiques of “full reserve banking” or ‘sovereign money’ proposals, we challenge four of the main criticisms made by Fontana & Saywer (this issue): (1) the impact of the proposal on government finances and fiscal policy; (2) the impact of the proposal on the supply of credit to the real economy; (3) the danger of private money creation re-emerging in the shadow banking sector, and (4) the argument that shadow banking, not commercial banking, is the real source of financial instability. Introduction The call for papers for this special "'Cranks' and 'brave heretics'" issue of the Journal refers specifically to Positive Money proposals (“for a radical restructuring of the way in which money is produced and used”) and relates them directly to views categorised as those of 'monetary cranks' in the New Palgrave Dictionary of Economics (Clark, D. (2008)). This effectively set the seal on our status, to which Fontana & Sawyer and Nersisyan & Wray in this issue have happily added their stamp. In this response we hope to show that we have been miscategorised. Other critiques of full reserve banking have been made by Dow (this issue), and Dow, Johnsen and Montagnoli (2015), while Lainà (2015) surveys the history of the idea and van Dixhoorn (2013) provides a literature review and comparison of similar (but distinct) proposals. In this response we will speak only for our own proposals, which are summarised in Dyson et al (2014), and will use the term ‘sovereign money system’ to distinguish them from other superficially similar proposals such as full reserve banking or narrow banking. -
Presenting the American Monetary Act (As of July 18, 2010) ©2010 American Monetary Institute, P.O
Presenting the American Monetary Act (as of July 18, 2010) ©2010 American Monetary Institute, P.O. Box 601, Valatie, NY 12184 [email protected] 518-392-5387 “Over time, whoever controls the money system controls the nation.” Stephen Zarlenga, Director Congressman Dennis Kucinich (D-Ohio) made history on December 17th, 2010 when he introduced a version of this Act as the National Employment Emergency Defense Act (NEED Act), HR 6550, which faithfully contains all of these monetary reforms. Introduction Dear Friends, The World economy has been taken down and wrecked by the financial establishment and their economists; and by their supporters in the media they own, and even by some in the executive and legislative branches, in the name of “free markets” and insatiable greed. Shame! Shame on them all! The American Monetary Act (the “Act”) is a comprehensive reform of the present United States money system, and it resolves the current banking crisis. “Reform” is not in its title, because the AMI considers our monetary system to never have been adequately defined in law, but rather to have been put together piecemeal under pressure from particular interests, mainly banking, in pursuit of their own private advantage, without enough regard to our nation’s needs. That is the harsh judgment of history as made clear in The Lost Science of Money, by Stephen Zarlenga (abbreviated LSM).* That book presents the research results of The American Monetary Institute to date and this Act puts the reform process described in Chapter 24 into legislative language. Chapters 1 thru 23 present the historical background and case studies on which Chapter 24 is based. -
Drone Money” to Put Monetary Policy Back to the People
“Drone money” to put monetary policy back to the people Edited by Jézabel Couppey-Soubeyran* With Emmanuel Carré**, Thomas Lebrun*** and Thomas Renault **** JANUARY 2020 ABSTRACT For more than ten years, monetary policy has been extraordinarily accommodating without achieving its objectives. Faced with this reality, central banks must innovate radically, using the potential offered by new technologies. This note proposes a new instrument inspired by ‘helicopter money’ and recent experiments in digital central bank currency: to pay each resident of the Eurozone between 120 to 140 euros of digital central bank currency, on an account opened for everyone at the European Central Bank. * Jézabel Couppey-Soubeyran is associate professor at Université Paris 1 Panthéon-Sorbonne and the Paris School of Economics. Her research focuses on banking, financial economics, monetary and prudential policies. (Corresponding author: [email protected]) ** Emmanuel Carré is associate professor at Université de Bretagne Sud. His research focuses on central banking, monetary policy and monetary and financial macroeconomics. *** Thomas Renault is associate professor at Université Paris 1 Panthéon-Sorbonne. His research focuses on “new data” (Big Data, alternative data …) and methods (machine learning, text analysis, network analysis…) economic and financial forecasts are based on. He created the popular economics blog Captain Economics. **** Thomas Lebrun is the head the operational risk division at a French banking group. His field of expertise includes -
Proposals for Monetary Reform – a Critical Assessment Focusing on Endogenous Money and Balance Mechanics
Paper for the FMM Conference 2016: Towards Pluralism in Macroeconomics? 20 Years-Anniversary Conference of the FMM Research Network Proposals for Monetary Reform – A Critical Assessment Focusing on Endogenous Money and Balance Mechanics by Ruben Tarne International Economics (MA), Berlin School of Economics and Law Table of contents 1 Introduction ............................................................................................................. 1 2 Proposals for Monetary Reform .............................................................................. 3 2.1 Common Views of the Current Monetary System of Sovereign Money Reform Proponents and Post-Keynesians ............................................................................. 4 2.2 The Sovereign Money Approach ............................................................................. 5 2.2.1 Transaction and Investment Accounts .............................................................. 5 2.2.2 The Monetary Creation Committee .................................................................. 7 2.2.3 Monetary Policy by Monetary Targeting ......................................................... 8 3 Post-Keynesian Critique of Monetary Reform Proposals ..................................... 11 3.1 The Nature of Money ............................................................................................. 12 3.2 Emergence of Near-Monies ................................................................................... 13 3.3 Stability in a Reformed System ............................................................................ -
5. Monetary Policy and Monetary Reform: Irving Fisher’S Contributions to Monetary Macroeconomics
A Service of Leibniz-Informationszentrum econstor Wirtschaft Leibniz Information Centre Make Your Publications Visible. zbw for Economics Loef, Hans E.; Monissen, Hans G. Working Paper Monetary policy and monetary reform: Irving Fisher's contributions to monetary macroeconomics W.E.P. - Würzburg Economic Papers, No. 11 Provided in Cooperation with: University of Würzburg, Chair for Monetary Policy and International Economics Suggested Citation: Loef, Hans E.; Monissen, Hans G. (1999) : Monetary policy and monetary reform: Irving Fisher's contributions to monetary macroeconomics, W.E.P. - Würzburg Economic Papers, No. 11, University of Würzburg, Department of Economics, Würzburg This Version is available at: http://hdl.handle.net/10419/48451 Standard-Nutzungsbedingungen: Terms of use: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Documents in EconStor may be saved and copied for your Zwecken und zum Privatgebrauch gespeichert und kopiert werden. personal and scholarly purposes. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle You are not to copy documents for public or commercial Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich purposes, to exhibit the documents publicly, to make them machen, vertreiben oder anderweitig nutzen. publicly available on the internet, or to distribute or otherwise use the documents in public. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, If the documents have been made available under an Open gelten abweichend von diesen Nutzungsbedingungen die in der dort Content Licence (especially Creative Commons Licences), you genannten Lizenz gewährten Nutzungsrechte. may exercise further usage rights as specified in the indicated licence. www.econstor.eu W. E. P. Würzburg Economic Papers Nr. -
The Emergence of Central Banking in Latin America In
1 Carlos Marichal and Daniel Díaz Fuentes, (1999), "The Emergence of Central Banking in Latin America in the early 20th Century", in Carl Holtfrerich y Jaime Reis (eds.), The Emergence of Central Banking from 1918 to the Present, Ashgate and EBAH, pp. 279-322. THE EMERGENCE OF CENTRAL BANKS IN LATIN AMERICA: ARE EVOLUTIONARY MODELS APPLICABLE 1 Carlos Marichal (El Colegio de México) The present paper is a preliminary effort to contribute to the debate on the comparative study of the origins of central banking in Latin America (especially in Argentina, Brazil and Mexico) with emphasis on an institutional framework analysis.2 The paper also attempts to link some of these problems with the discussion among economic historians on the origins and evolution of central banking in Europe from the 19th century, most notably 1 The present paper is the first part of a joint communication with Daniel Díaz Fuentes to be presented at the EABH Congress in Lisbon in May, 1996. Daniel Díaz is preparing the second part of the paper on the complex process of establishment of central banks in the 1920s and 1930s, with special reference to the cases of Mexico (1925), Argentina (1935), and the long delay in the case of Brazil, where a central bank was not set up until 1965. 2 The most important recent work developing this comparative framework is Drake (1989). 2 as developed on a comparative basis by Charles Goodhart and by historians of the early history of central banks in other European countries.3 I propose that the antecedents and early history of central banking in Latin America are distinct and that it is misleading to think strictly in terms of evolutionary models both with respect to the origins of these banks as well as to their initial operations in the 1920s and 1930s. -
When the Periphery Became More Central: from Colonial Pact to Liberal Nationalism in Brazil and Mexico, 1800-1914 Steven Topik
When the Periphery Became More Central: From Colonial Pact to Liberal Nationalism in Brazil and Mexico, 1800-1914 Steven Topik Introduction The Global Economic History Network has concentrated on examining the “Great Divergence” between Europe and Asia, but recognizes that the Americas also played a major role in the development of the world economy. Ken Pomeranz noted, as had Adam Smith, David Ricardo, and Karl Marx before him, the role of the Americas in supplying the silver and gold that Europeans used to purchase Asian luxury goods.1 Smith wrote about the great importance of colonies2. Marx and Engels, writing almost a century later, noted: "The discovery of America, the rounding of the Cape, opened up fresh ground for the rising bourgeoisie. The East-Indian and Chinese markets, the colonisation of America [north and south] trade with the colonies, ... gave to commerce, to navigation, to industry, an impulse never before known. "3 Many students of the world economy date the beginning of the world economy from the European “discovery” or “encounter” of the “New World”) 4 1 Ken Pomeranz, The Great Divergence , Princeton: Princeton University Press, 2000:264- 285) 2 Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations (1776, rpt. Regnery Publishing, Washington DC, 1998) noted (p. 643) “The colony of a civilized nation which takes possession, either of a waste country or of one so thinly inhabited, that the natives easily give place to the new settlers, advances more rapidly to wealth and greatness than any other human society.” The Americas by supplying silver and “by opening a new and inexhaustible market to all the commodities of Europe, it gave occasion to new divisions of labour and improvements of art….The productive power of labour was improved.” p. -
The Ends of Four Big Inflations
This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Inflation: Causes and Effects Volume Author/Editor: Robert E. Hall Volume Publisher: University of Chicago Press Volume ISBN: 0-226-31323-9 Volume URL: http://www.nber.org/books/hall82-1 Publication Date: 1982 Chapter Title: The Ends of Four Big Inflations Chapter Author: Thomas J. Sargent Chapter URL: http://www.nber.org/chapters/c11452 Chapter pages in book: (p. 41 - 98) The Ends of Four Big Inflations Thomas J. Sargent 2.1 Introduction Since the middle 1960s, many Western economies have experienced persistent and growing rates of inflation. Some prominent economists and statesmen have become convinced that this inflation has a stubborn, self-sustaining momentum and that either it simply is not susceptible to cure by conventional measures of monetary and fiscal restraint or, in terms of the consequent widespread and sustained unemployment, the cost of eradicating inflation by monetary and fiscal measures would be prohibitively high. It is often claimed that there is an underlying rate of inflation which responds slowly, if at all, to restrictive monetary and fiscal measures.1 Evidently, this underlying rate of inflation is the rate of inflation that firms and workers have come to expect will prevail in the future. There is momentum in this process because firms and workers supposedly form their expectations by extrapolating past rates of inflation into the future. If this is true, the years from the middle 1960s to the early 1980s have left firms and workers with a legacy of high expected rates of inflation which promise to respond only slowly, if at all, to restrictive monetary and fiscal policy actions. -
PAVING the WAY for a SUSTAINABLE RECOVERY Email: [email protected] Website
Author: Andrew Jackson Editor: Ben Dyson Design: Henry Edmonds Positive Money 205 Davina House 137-149 Goswell Road London EC1V 7ET SOVEREIGN MONEY Tel: 0207 253 3235 PAVING THE WAY FOR A SUSTAINABLE RECOVERY Email: [email protected] Website: www.positivemoney.org ISBN 978-0-9574448-2-9 © November 2013, Positive Money PositiveMoney Acknowledgements We would like to thank Vicky Chick, Nick Edmonds, Dominic Haldane, Graham Hodgson, Michael Reiss, Stephen Stretton and the whole Money and Credit group at UCL for their useful comments and sugges- tions. We would also like to thank Joseph Huber and James Robertson, whose work in Creating New Money partly inspired this paper. Finally, we would like to express our gratitude to the supporters of Positive Money, without whom this paper would not have been possible. Of course the contents of this paper and any mistakes, errors or omissions remain the author’s own. Contents Executive Summary 4 Part 1: An introduction to Sovereign Money Creation 7 Introduction 7 The financial crisis 7 The post-crisis recession and recovery 9 Policy responses to the recession 10 Conventional monetary policy: interest rates 11 Unconventional monetary policy 11 Why monetary policy was ineffective in boosting the economy 13 Fiscal policy 14 Summary: The policy dilemma 14 Prospects for a sustainable recovery 15 An alternative policy: Sovereign Money Creation 16 A step-by-step procedure for Sovereign Money Creation 18 Using Sovereign Money Creation during downturns 19 Using Sovereign Money Creation as a conventional -
Monetary Reform, Central Banks and Digital Currencies
Department Discussion Paper DDP1805 ISSN 1914-2838 MONETARY REFORM, CENTRAL BANKS AND DIGITAL CURRENCIES Sheila Dow Department of Economics, University of Victoria Victoria, B.C., Canada V8W 2Y2 June, 2018 Abstract The modern debate about monetary reform has taken on a new twist with the development of distributed ledger payments technology employing private digital currencies. In order to consider the appropriate state response, we go back to first principles of money and finance and the case for financial regulation: to ensure provision of a safe money asset and a stable supply of credit within an inherently unstable financial system. We consider calls to privatise money or to restrict money issue to the state against the background of the increasing marketisation of the financial sector and money itself. Following an analysis of private digital currencies, we then consider proposals for state issue of digital currency. It is concluded that the focus of attention should instead be on updating of regulation, not only to encompass digital currencies, but also to address other innovations in the financial sector which generate credit and liquidity, in order to meet the needs of the real economy. Keywords: digital currencies, central banks, financial instability, financial regulation JEL Classifications: E3, E5, G1 Author contact: Sheila Dow, Dept. of Economics, University of Victoria, P.O. Box 1700, STN CSC, Victoria, B.C., Canada V8W 2Y2, E-mail: [email protected]. 1 Monetary Reform, Central Banks and Digital Currencies1 Introduction How does innovation in digital currencies affect the ability of the financial system to perform its socially-useful functions, and what should be the state’s response?2 The first of these functions is to provide a safe money asset as the basis for contracts as well as payments, and as store of value to hold when returns on alternative assets are uncertain.