How “Monetization” Really Works—Examples from Nations’ Policy Responses to COVID-19

Felipe, Jesús; Fullwiler, Scott T.; Estrada, Gemma; Jaber, Maria Hanna; Magadia, Mary Ann; Patagan, Remrick

doi:10.22617/wps200368-2

2020

DOI: 10.22617/wps200368-2

|View full text |Cite

How “Monetization” Really Works—Examples from Nations’ Policy Responses to COVID-19

Jesús Felipe¹,

Scott T. Fullwiler²,

Gemma Estrada³

et al.

Abstract: The coronavirus disease (COVID-19) has forced governments to provide stimulus packages amid falling tax revenues, prompting debate on “monetization” of government debt. Drawing on selected country experiences, this paper shows through actual central bank operations and accounting that “monetization,” commonly equated with “printing money,” is operationally impossible and that inflationary concerns are misplaced.

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...

Citation Types

Supporting

Mentioning

Contrasting

Year Published

2021

2023

Publication Types

Select...

Article5

Relationship

Self Cite0

Independent5

Authors

Journals

Cited by 7 publications

References 1 publication

Supporting

Mentioning

Contrasting

Order By: Relevance

Towards an institutional “landscape” view of modern money creation mechanisms and some reflections on their ecological significance

Hook

2023

Sustain Sci

View full text Add to dashboard Cite

In recent years, a number of different strands within heterodox economic thinking have successfully provided more empirically robust and sociologically informed analyses of how money gets created. However, there is a tendency within these analyses to discuss the different money creation theories and institutional practices in isolation, inhibiting a broader audience from grasping the whole institutional picture. By integrating contemporary heterodox theories and the latest empirical evidence, this article therefore attempts to develop a “landscape” view of modern money creation that visualizes and explains the different ways that modern money is created. It suggests that, while it is ultimately only commercial banks that can “create” new bank deposits in customers’ accounts, this may be initiated by one of three institutional mechanisms: by customers “borrowing new money into existence” when commercial banks make loans; by central banks creating new money when they purchase assets such as government bonds from investors; and by the government “spending new money into existence”. The article also reflects on how a clearer institutional understanding of these processes may be helpful in improving our overall capacity to think about how money creation may better serve current urgent social and environmental needs, especially in the post-COVID-19 context.

show abstract

Towards an institutional “landscape” view of modern money creation mechanisms and some reflections on their ecological significance

Hook

2023

Sustain Sci

View full text Add to dashboard Cite

show abstract

Stabilization policy of the state in the post-pandemic period

2021

View full text Add to dashboard Cite

Research background: The coronavirus pandemic, which has affected all spheres of society and the economy, has formed new realities and conditions for modern world development. The governments of many countries have faced a choice of how to combine the security of citizens ’ lives and the need to resist the decline in production, employment, and income. Purpose of the article: The main purpose of the presented article is to study the instruments of stabilization policy during the pandemic and post-pandemic economy and to identify measures aimed at reorienting from ensuring monetary and budgetary stability to expanding effective demand and stimulating the economy. Methods: To conduct the study, we used official statistics data, the analysis of which allowed us to determine the degree of mutual influence of key parameters of economic development. Findings & Value added: The results show that in developed countries, support measures by monetary policy instruments are limited, so for the most part, fiscal mechanisms to support the population and business are implemented. In Russia, the opportunities to soften monetary policy with traditional monetary policy measures still retain some effectiveness. However, the current economic policy imposes a forced type of consumer behavior based on making financial decisions in the absence of choice, so such decisions form negative consequences — indebtedness and poverty. In this regard, recommendations are given for the implementation of stabilization policy instruments aimed at reorienting it from ensuring monetary and budgetary stability to stimulating the Russian economy and expanding the monetary base of demand.

show abstract

Monetary Stabilization Policy in the Coronacrisis

2021

View full text Add to dashboard Cite

Research background: In 2020, all the world's economies faced a new, special phenomenon – the coronacrisis caused by the pandemic, and with the fall of most economic indicators. In the current conditions, it is extremely important to build a competent monetary policy in order to soften the "blows" caused by the global recession for national economies. Purpose of the article: The main purpose of the presented article is the analysis of measures to stimulate the economy using monetary policy instruments in the conditions of the coronacrisis. Methods: To conduct the study, we used official statistics data, on the basis of which an econometric model was built, which allowed us to determine the forecast values for inflation, taking into account the impact of monetary and non-monetary factors. Findings & Value added: The econometric analysis show the high importance of non-monetary factors of inflation. This makes it difficult to assess the monetary policy, since Central banks are able to influence non-monetary factors only indirectly. The paper notes the influence of the refinancing rate on loans to the real sector of the economy, since the stabilization monetary policy should be primarily aimed at maintaining economic growth. The correlation field of the relationship between the index of rigidity of restrictions developed by the University of Oxford and loans to small and medium-sized businesses is constructed. It is noted that with the reduction of administrative restrictions, the volume of loans granted to small and medium-sized businesses increases.

show abstract

scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.

Contact Info

customersupport@researchsolutions.com

10624 S. Eastern Ave., Ste. A-614

Henderson, NV 89052, USA

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Blog Terms and Conditions API Terms Privacy Policy Contact Cookie Preferences Do Not Sell or Share My Personal Information

Made with 💙 for researchers

Part of the Research Solutions Family.

How “Monetization” Really Works—Examples from Nations’ Policy Responses to COVID-19

Cited by 7 publications

References 1 publication

Towards an institutional “landscape” view of modern money creation mechanisms and some reflections on their ecological significance

Towards an institutional “landscape” view of modern money creation mechanisms and some reflections on their ecological significance

Stabilization policy of the state in the post-pandemic period

Monetary Stabilization Policy in the Coronacrisis

Contact Info

Product

Resources

About