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Is there a monetary growth imperative?

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  • Strunz, Sebastian
  • Bartkowski, Bartosz
  • Schindler, Harry

Abstract

We do not know; but simplistic answers to the title's question should be mistrusted. In this paper, we first provide a literature overview, laying out the vast diversity of theories on the role of monetary aspects for economic growth both within mainstream growth theory and within heterodox perspectives. In fact, completely contradicting results have been derived from a variety of reasonable theories. Based on this literature survey, we explore the narrative background of the most prominent theories as each of them is related to and justified by a distinct narrative. For instance, mainstream growth textbooks are based on the assumption that "money is a neutral medium of exchange" while other approaches hold that "zero interest rates are a precondition for a stationary economy". We show how these narratives - though they may well contain some truth - lend themselves to serve as myths, which rather inhibit than facilitate our understanding of the complex relationship between monetary variables and economic growth. Finally, we discuss consequences for the degrowth debate in terms of practical proposals for overcoming assumed growth imperatives as well as theoretical consequences.

Suggested Citation

  • Strunz, Sebastian & Bartkowski, Bartosz & Schindler, Harry, 2015. "Is there a monetary growth imperative?," UFZ Discussion Papers 5/2015, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
  • Handle: RePEc:zbw:ufzdps:52015
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    1. Richters, Oliver & Siemoneit, Andreas, 2019. "Wachstumszwang – eine Übersicht," ZOE Discussion Papers 3, ZOE. institute for future-fit economies, Bonn.
    2. Richters, Oliver & Siemoneit, Andreas, 2017. "Consistency and stability analysis of models of a monetary growth imperative," Ecological Economics, Elsevier, vol. 136(C), pages 114-125.
    3. Richters, Oliver & Siemoneit, Andreas, 2020. "System change, not climate change? Marktwirtschaft zwischen Utopie und Wachstumszwang," ZOE Discussion Papers 5, ZOE. institute for future-fit economies, Bonn.
    4. Larue, Louis, 2020. "The Ecology of Money: A Critical Assessment," Ecological Economics, Elsevier, vol. 178(C).
    5. Richters, Oliver & Siemoneit, Andreas, 2017. "Fear of stagnation? A review on growth imperatives," VÖÖ Discussion Papers 6/2017, Vereinigung für Ökologische Ökonomie e.V. (VÖÖ).
    6. Smith, Thomas S.J. & Baranowski, Mariusz & Schmid, Benedikt, 2021. "Intentional degrowth and its unintended consequences: Uneven journeys towards post-growth transformations," Ecological Economics, Elsevier, vol. 190(C).
    7. Richters, Oliver & Siemoneit, Andreas, 2019. "Growth imperatives: Substantiating a contested concept," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 126-137.
    8. Hartley, Tilman & Kallis, Giorgos, 2021. "Interest-bearing loans and unpayable debts in slow-growing economies: Insights from ten historical cases," Ecological Economics, Elsevier, vol. 188(C).
    9. Oliver Richters & Andreas Siemoneit, 2018. "The contested concept of growth imperatives: Technology and the fear of stagnation," Working Papers V-414-18, University of Oldenburg, Department of Economics, revised Nov 2018.

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