Money Supply in a No-Growth Economy

* Article: Money supply in a no-growth economy. By Stef Kuypers. Happonomy, November 2020

URL = https://www.researchgate.net/publication/345136143_Money_supply_in_a_no-growth_economy?

Description

"In economic circles a debate has been going on for a while now: does the current monetary system have an embedded growth imperative? Several papers have been published on the topic and the conclusions differ. The premise of this paper is that, theoretically, it is indeed possible to have a no-growth economy with a debt based, interest bearing monetary system but that the conditions needed for it to become reality are impossible to implement. The first part of the paper presents a study of the conclusions of previous papers with a focus on the necessary conditions for a no-growth economy to work with a debt based, interest bearing monetary system. The second part introduces an aggregated, stock and flow consistent computational and parameterisable model of the current monetary system under the monetary policies currently active in the EU. This model is then used to simulate money supply under the different conditions brought forward by the previous papers. These conditions are subjected to research from behavioural fields in order to determine the plausibility of implementing them in the real world. The third part introduces an alternative monetary system which does not need such strict conditions in order to remain stable in a no-growth economy."