The unfettered creation of money by private banks has generated overwhelming instability, undermining the fundamental principle that money creation should serve the public good. By implementing safeguards that ensure that credit serves productive purposes, policymakers can achieve debt-free, stable, and sustainable economic growth.
BERLIN/SOUTHAMPTON – Last month, the BRICS countries (Brazil, Russia, India, China, and South Africa) announced the establishment of their own development bank, which would reduce their dependence on the Western-dominated, dollar-focused World Bank and International Monetary Fund. These economies will benefit from increased monetary-policy agency and flexibility. But they should not discount the valuable lessons offered by advanced-country central banks’ recent monetary-policy innovation.
BERLIN/SOUTHAMPTON – Last month, the BRICS countries (Brazil, Russia, India, China, and South Africa) announced the establishment of their own development bank, which would reduce their dependence on the Western-dominated, dollar-focused World Bank and International Monetary Fund. These economies will benefit from increased monetary-policy agency and flexibility. But they should not discount the valuable lessons offered by advanced-country central banks’ recent monetary-policy innovation.