According to the rising demand of sustainable economic models, based on the increasing awareness that our planet cannot withhold the current pressure of the continuous economic growth, this essay raises the question whether our current monetary system creates a growth imperative and if sovereign money is an alternative to overcome this growth imperative. The essay gives an introduction into the function of the two-tier, fractional reserve banking system and reflects the consequences of the “money creation privilege” of modern private banks. Moreover, it is discussed if and how this system creates a growth imperative in our economic system.
Therefore, the neutrality theory of money is criticized as well as the common idea that interest creates growth. Furthermore, the pro-cyclical behavior of private banks and the lack of control of central banks is
discussed as a possible reason for growth imperative. Still as a result there is no systemic necessity to growth based on the monetary system. The monetary system is not a driving condition of the economic growth, but it lays the necessary basis for growth. The essay concludes that it is questionable that the growth imperative can be avoided with sovereign money, especially because the causality goes from economic growth to money creation and not vice versa.
Table of Contents
1 INTRODUCTION
2 THE MONETARY SYSTEM
2.1 HOW THE MONETARY SYSTEM DOES NOT WORK
2.2 HISTORY OF MONETARY SYSTEM
2.2.1 THE MONEY CREATING PROCESS
2.2.2 CENTRAL BANKS
2.3 FINANCIAL SYSTEM TODAY
3 MONEY AND GROWTH
3.1 MONEY CREATION AND GROWTH
3.2 IS THERE A GROWTH IMPERATIVE ?
4 SOVEREIGN MONEY
4.1 THE BASIC IDEA OF SOVEREIGN MONEY
4.2 CONCLUSION : CAN SOVEREIGN MONEY DECREASE THE GROWTH IMPERATIVE ?
5 QUOTES
- Arbeit zitieren
- Tim Mauch (Autor:in), 2019, The monetary system and sovereign money, München, GRIN Verlag, https://www.grin.com/document/471291
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Laden Sie Ihre eigenen Arbeiten hoch! Geld verdienen und iPhone X gewinnen. -
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Laden Sie Ihre eigenen Arbeiten hoch! Geld verdienen und iPhone X gewinnen. -
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Laden Sie Ihre eigenen Arbeiten hoch! Geld verdienen und iPhone X gewinnen.