Yesterday, the United Nations held a high-level conference on how to finance the Sustainable Development Goals (SDGs). We have therefore come up with some rough ideas on how central banks could help partially fund some of these goals.
Summary Ann Pettifor’s new book, The Production of Money is an excellent contribution to the growing body of thought exposing mainstream, neoclassical economics’ poor understanding of money, banking, and finance, and how its thinking has led to a financial system that we serve, rather than serves us.
This is the second part of our article dealing with the argument that bank lending must lead to escalating debt because banks don't create the money needed to pay the interest on the debt. Part 1 explained how the wrong conclusions have been drawn from the oft-repeated ‘banker on a desert island’ analogy. We showed that it is mathematically (and therefore logically) possible for both the principal and interest of a loan to be repaid.
With this week’s budget, the Chancellor doubled down on a failed economic model. The government will continue cutting spending into the next parliament, and earlier this week, it was revealed that the Treasury has asked most departments to find an extra 6% of savings.
An interesting paper by Ulrich Volz on the role of central banks in enhancing green finance was published recently, originally on the UNEP website.