Abstract: Ecological economists tackling monetary issues advocate monetary policies that seem, from a post-Keynesian point of view, either questionable or unnecessary. Ecological monetary economics currently appears to be mostly articulated around two core assumptions: First, to be achieved, a stationary state (and a fortiori a degrowth economy) would require interest rates set at zero. Second, such an economy would require a monetary system in which the monetary authorities have full control over the quantity of money in circulation. This paper adopts a critical stance towards the emerging ecological monetary economics from the standpoint of the post-Keynesian approach. It deals with the view on interest rates and then tackles the issue of a 100% reserve monetary system. We argue that interest rates set to zero is an unnecessary condition to reach a steady-state economy and that a 100% reserves monetary system would preclude any sustainable path towards a non growing economy.
Key words: Ecological macroeconomics ; Ecological monetary economics ; post-Keynesian economics ; steady-state ; degrowth
This media entry was a contribution to the special session “Macroeconomics of Degrowth I” at the 4th International Degrowth Conference in Leipzig in 2014.