Regensburg 2013 – scientific programme
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SOE: Fachverband Physik sozio-ökonomischer Systeme
SOE 4: Economic Growth and Longevity I
SOE 4.4: Talk
Monday, March 11, 2013, 12:15–12:30, H37
Growth compulsion in the monetary system — Christian Kimmich1,3 and •Oliver Richters2,3 — 1Humboldt-Universität zu Berlin — 2Universität Oldenburg — 3Wissenschaftliche Arbeitsgruppe nachhaltiges Geld
The need for economic growth is underlined regularly in politics and most branches of economics, though in the 1970ies, fundamental thermodynamic arguments and system dynamics models gave first evidence of ``the Limits to Growth''. These economic constraints are today confirmed, e.g. by the strong correlation of rising energy consumption and greenhouse gas emissions with Gross domestic product (GDP). To solve this contrast, it is necessary to ask the question if and how our economy is reliant on positive growth rates. In our work, we specifically focus on the monetary order.
We investigate a simplified version of our current monetary system using a stock-flow-consistent system dynamics model of credit money creation, use and redemption. We distinguish between different behaviours of debtors and creditors and examine in each case the trend evolution of debts, deposits and the GDP. Integrating empirical data from economics, we derive the dominant scenarios and conclude that positive growth rates are crucial for the stability of the investigated monetary system. Finally, we motivate why this result can be extrapolated to existing monetary systems and present possible model extensions.