This article lists three public interests in the field of monetary economics that require government intervention, namely (i) inflation around 2%; (ii) sustainable debt ratios in a stable financial system and (iii) a payments system accessible to all. An analysis based on a consistent modeling of the relationship between demand for money and demand for credit according to the set-up of closed national balance sheet accounts shows that this guarantee does not require the government to take over the money supply itself. Adequate regulation of the banking system is sufficient. However, it is advisable to provide a form of electronic banknotes as a back-up, whereby payment transactions remain possible even in the event of a complete breakdown of facilities.
|Translated title of the contribution||Safeguarding the public interest in demand for money and demand for credit|
|Number of pages||17|
|Early online date||30 Jun 2020|
|Publication status||Published - Jun 2020|