Is there a monetary growth imperative?

In this chapter, we first provide a literature overview, laying out the broad diversity of theories on the role of monetary aspects for economic growth both within mainstream growth theory and within heterodox perspectives. In fact, completely contradictory results have been derived from a variety of reasonable theories. Based on this literature survey, we explore the narrative background of the most debated theories as each of them is related to and justified by a distinct narrative. For instance, mainstream growth textbooks are based on the narrow assumption that “money is a neutral medium of exchange†. We show how these narratives – though they may well contain some truth – lend themselves to serve as myths, which inhibit rather than facilitate our understanding of the relationship between monetary variables and economic growth. In particular, simplistic tenets such as “zero interest rates are a precondition for a stationary economy†fail to capture the complexity of the social phenomena at hand. Finally, we discuss consequences for the degrowth debate in terms of practical proposals for overcoming assumed growth imperatives as well as theoretical challenges.