Following the rise of crypto-assets, digitization in payment habits and most recently in the wake of Covid-19, discussions surrounding the poten-tial introduction of central bank digital currencies (CBDC) have intensified. Yet despite the breadth of literature on CBDC, misconceptions continue to linger with regard to both the purpose and provision of a CBDC. The aim of this article is to shed further light on both dimensions. This paper firstly argues that one purpose of CBDC is to ensure that privately issued means of payments remain fungible, and secondly, that many architectural arrangements for the provision of CBDC such as "synthetic CBDC" conflate with the very idea of CBDC constituting a claim on the central bank.
The rapid expansion of digital currencies-including cryptocurrencies, sta-ble coins and central bank digital currencies (CBDCs)-has reshaped the monetary landscape. As is usual, moments of technological leaps are accompanied by debate over larger and smaller considerations, from how the new technology will effect the course of human development, to what the new thing should be called and how it should be classified within the realm of already existing things. What is unusual about the rise of digital currencies is the sheer amount and variety of the technological innovation. Perhaps as never before, monetary reality is quickly outrunning theory. At a popular level, Bitcoin has occupied much debate since its public appear-ance in the early 2010s. Since then, prominent individuals have associated themselves with one or another short-lived cryptocurrency, grabbing much of the spotlight while the universe of digital currencies has grown expo-nentially, unnoticed by most.
The main objective of this article is to reflect on the challenges that monetary theory faces in light of two interrelated phenomena arising from the digitalization of monetary-financial operations: private cryptocurrencies and central bank digital currencies (CBDCs). The authors argue that the "old" controversies regarding the nature of money gain renewed significance with the incorporation of the digital dimension, making it necessary to revisit classic heterodox debates to understand better a new generation of virtual tokens that impact the balance sheets of public and private actors in the ongoing construction of a digital monetary ecosystem. Thus, the article discusses interpretations of credit-money and Chartalism, and recounts the recent history of the most important private cryptocurrencies and CBDCs, to reflect on the financial asset nature of the former and the asymmetries of the latter within the framework of an unequal international monetary-financial system.
Ethiopia has committed to ambitious climate policies aiming to achieve net-zero emissions by 2050. Even though the benefits of a low-emission development pathway are higher than its costs, the latter are still very sig-nificant. Cumulative green investment and current expenditures of the country's Long-Term Low-Emission Development Strategy (LT-LEDS) are estimated to be more than USD 300 billion until 2050, which raises the question of how the Government of Ethiopia can mobilize the finance required. By means of a new stock-flow-consistent model, this analysis shows that Ethiopia is able to finance the largest part of green investment out of its own means originating in the domestic banking system. About USD 27 billion in foreign currency, hence only a small share of total costs, are required for a certain period of time to bridge temporary balance-of- payments pressure in the course of high economic growth and ongoing structural change. Moreover, the simulation also shows that the net-zero emissions can be achieved with stable ratios of public and private debt, non-accelerating inflation, and employment.
The emergence of cryptocurrencies was supposed to threaten established traditional currencies backed by the state. The discourse around them made them represent a critique of the operation of the monetary systems. The article analyzes cryptocurrencies development from its origin, adopting a Polanyian perspective, specifically the concepts of double movement and embeddedness. If the cryptocurrency project is successful, i.e. it is considered along with other monies, it would be disembedded from society since it would be ruled exclusively by the market. The complete commodification of money accompanies this process since cryptocurrencies are produced and sold only for profit. Because of their design, cryptocurrencies cannot be considered all-purpose money but only special-purpose money since they only fulfill, at best, one of the functions of money; they have also become crypto-assets characterized by the rapid growth in their market capitalization and the violent changes in their value. The state's reaction to the development of cryptocurrencies can be interpreted as a symptom of society trying to defend itself from the pernicious effects of the free market. By issuing initiatives and warnings to regulate or even ban cryptocurrencies, especially by financial institutions and other private entities, it tried to limit their pernicious effects on the financial system and the economy. Also, the Central Bank Digital Currency (CBDC) projects can be interpreted as a way for the state to protect society from the disembeddedness of money since these instruments could take away some of the private institutions' power. In this way, the article offers the hypothesis that the appearance of cryptocurrencies and the state's reaction conform to the Polanyian double movement.
The potential introduction of central bank digital currencies (CBDCs) poses significant questions regarding the dynamics of endogenous money creation and the future role of commercial banks. Adopting a circuitist perspective, this article analyzes how publicly accessible CBDCs could reshape established monetary circuits. We examine the potential for significant bank disintermediation as funds shift to CBDCs, exploring plausible strategic responses from commercial banks, including service differentiation or withdrawal from basic payments. The analysis explores the complex implications for monetary policy effectiveness and financial stability, considering both potential benefits (e.g., enhanced policy transmission) and risks (e.g., accelerated bank runs, constrained credit creation). While CBDCs offer opportunities for financial inclusion, we also note significant practical barriers. Finally, the article assesses, within the circuitist framework, whether CBDCs are likely to function primarily as tools for direct government financing or remain intrinsically linked to the existing private credit creation mechanisms mediated by banks.
This article examines the mBridge project, a multi-central bank digital currency (CBDC) platform that allows cross-border payments to be settled in local currencies, a feature that could, over time, reduce US dollar dominance. It situates mBridge in the broader landscape of CBDC experiments, emphasizing the contrasting priorities of countries in the Global North and South. Drawing on a detailed case study, the paper examines how mBridge functions, the challenges likely to arise in its large-scale deployment, and the implications it raises for the future of the international monetary and financial system (IMFS). By linking technical debates on cross-border payment infrastructures with geopolitical concerns about monetary dependence, the article aims to shed light on the disruptive potential of CBDCs and their limits as instruments of systemic change.
This article examines the challenges that blockchain-based digital currencies pose to state monetary sovereignty in the digital era. As technological advancements transform monetary systems, decentralized peer-to-peer transactions threaten to erode state control over monetary policy. We distinguish between wholesale and retail central bank digital currencies (CBDCs), assessing their respective roles in mitigating sovereignty risks. While wholesale CBDCs reinforce traditional monetary authority, retail CBDCs redefine sovereignty by countering the rise of decentralized crypto-assets and foreign CBDCs. We argue for a dual-CBDC system that integrates both models, with a particular emphasis on an indirect retail CBDC framework to enhance financial stability, ensure public accountability, and foster innovation.
Nations around the world are conducting research into the design of central bank digital currency (CBDC), a new, digital form of money that would be issued by central banks alongside cash and central bank reserves. Retail CBDC would be used by individuals and businesses as form of money suitable for routine commerce. An important motivating factor in the development of retail CBDC is the decline of the popularity of central bank money for retail purchases and the increasing use of digital money created by the private sector for such purposes. The debate about how retail CBDC would be designed and implemented has led to many proposals, which have sparked considerable debate about business models, regulatory frameworks, and the socio-technical role of money in general. Here, we present a critical analysis of the existing proposals. We examine their motivations and themes, as well as their underlying assumptions. We also offer a reflection of the opportunity that retail CBDC represents and suggest a way forward in furtherance of the public interest.
The article examines the influence of German thought in Brazil, particularly Ordoliberalism and the Social Market Economy, as a possible framework for the economic policies of the Brazilian dictatorship or some of its most emblematic figures. These ideas, distinct from classical neoliberalism, were especially relevant to the policies implemented between 1964 and 1973, characterized by a strong reliance on the state apparatus and economic planning. This hypothesis is supported by empirical evidence found in primary and secondary sources from key actors in this process of intellectual circulation. These sources indicate an engagement with such theories both before and during the military regime, further reflected in diplomatic visits and joint projects between the two countries-initially shaped by a strong anti-communist orientation. This suggests that West Germany served as a model for countries with weak market structures and played a crucial role in the U.S. Cold War strategy. However, signs of autonomous ambitions from both Germany and Brazil can also be observed.
I suggest that the growing consumption differential between white-collar workers and blue-collar workers has contributed to market concentration at the macro level in a direct and long-term structural manner. The causal nexus can be better explained through the consumption preferences of high-wage-earning white-collar workers who have a lower price elasticity of demand. Conspicuous consumption preferences work to lower the break-even point and validate markups of big firms and thereby facilitate the diffusion of concentration across sectors. Applying cointegration and Granger causality tests to the U.S. data from 1984 to 2017, the results confirm the existence of a positive and long-term structural relationship of causality from the consumption differential to the increase in market concentration.
The AI industry is betting that 'scaling', i.e., adding more and more data, GPUs, compute infrastructure and dollars, will lead to machine superintelligence or Artificial General Intelligence (AGI)-which in turn will lead to exponential growth of output, productivity and profits for the industry and the larger American economy. Focusing on AGI and generic LLMs, the point of this article is plain: AI's 'scaling' strategy must fail and the AI data-center investment bubble will pop. The article identifies four bottlenecks: (1) the planned $5 trillion investment in data center infrastructure (during 2026-2030) is not going to pay off; AI revenues will not increase enough and AI inference cost continue to rise faster than revenues; (2) AI firms will have to resort to hyper-scale borrowing from banks and investment-grade bond markets to fund their capex; this hyperscale borrowing will create a ticking time bomb on the balance sheets of AI firms, because the core capital expenditure on specialized GPUs and server risks becoming economically obsolete within two or three years; (3) it will be impossible to build the projected data center infrastructure fast enough, because upstream suppliers-producing everything from copper wire to turbines to transformers and switchgear-will run into labor shortages, long waiting times for power grid connections, material bottlenecks and regulatory blowback; and (4) the strategic bet of frontier AI firms that AGI can be achieved by building ever more data centers and using ever more chips is already going bad; AI products will continue to be untrustworthy for high-stake usage. As a result, the magical projections of exponential growth, which defy economic and financial logic and fatally ignore unforgiving real-world constraints will turn out to be wrong. The fact that the AI industry is the main source of growth in an otherwise sclerotic U.S. economy and is driven by a concentrated set of hyper-scalers engaging in 'circular' financial transactions based on aggressively optimistic long-term cash flow-generating potential should be a very serious cause for concern.
We use process tracing to identify key individuals and institutions during the emergence and consolidation of neoliberalism in Colombia (1980-2022). Our method compiles and offers in a directly comparable setting, the individual professional trajectories and scholarly viewpoints of a set of 62 key economists. The analysis reveals a process of revolving doors between academia, think tanks, and government, where the key individuals rotated between different institutions, using academic credentialism and networks of social capital to access the highest level of policy making. We show evidence that this academic credentialism was not justified in superior academic achievement or research output, while offering a standardized approach to the policy viewpoints of the key individuals from a scholarly perspective.
Based on the literature on growth regimes and growth drivers in financialized economies, our article analyses the growth regimes and growth drivers in nineteen European economies over the period 2000-2019. Unlike previous work, we divide this period into three sub-periods, corresponding to the years before (2000-2007), during (2008-2013), and after (2014-2019) the Great Recession and the Eurozone crisis. We identify the existence of four growth regimes: Debt-financed domestic demand-led regime, Self-financed domestic demand-led regime, Export-led regime, and Contractive regime. These growth regimes differ from those highlighted in existing studies due to our division of the period after the outbreak of the Great Recession into two sub-periods. Additionally, we find that some growth drivers can help to explain not only the adscription of each country to a particular growth regime, but also the shifts of economies between different growth regimes during the periods under analysis.
This article examines the positive role that public banking systems can play in advancing Sustainable Development Goals (SDGs) from a European public policy perspective, given the persistent difficulties of the international financial system in sustaining capital formation under a logic of sustainability. Although public banks are often cited as key institutional actors, their contribution to SDG financing remains conceptually underexplored. The prevailing policy narrative assigns them a complementary role in supporting private investment but rarely clarifies how public and private finance interact once their respective balance sheets are properly defined and consolidated. Building on Griffith-Jones et al. (2023), the article develops a framework for assessing the additionality and impact of public banks that: (a) adopts the endogenous money approach, distinguishing initial from final finance; (b) incorporates a sequential time structure derived from the monetary circuit, making initial finance the causal driver of subsequent flows; and (c) employs a stock-flow consistent (SFC) accounting representation based on gross rather than net flows, consistent with financial accounting practice and suitable for conditions of fundamental uncertainty. Within this framework, comparative-dynamics exercises in logical time yield conclusions applicable to historical time, thereby retaining policy relevance. Four illustrative cases-three domestic and one cross-border-demonstrate how public and private banks finance investment and how sectoral consolidation reveals their differing capacities to bear uncertainty. The resulting hierarchy of liquidity and risk-bearing implies that only first-rank public liquidity can socialize investment risk ex ante, reframing the concept of public banks' additionality in financing sustainable development.
This article explores the contrasting yet complementary economic theories of Augusto Graziani and Hyman Minsky, focusing on their analyses of money, finance, and economic instability within capitalist systems. Graziani's rendition of the "Theory of the Monetary Circuit" (TMC) provides a structural framework for understanding the endogenous creation and circulation of money, emphasizing the roles of banks, firms, and workers abstracting from subjective perceptions. In contrast, Minsky's "Financial Instability Hypothesis" (FIH) highlights the dynamic and inherently unstable nature of financialized economies, in which periods of stability lead to increased risk-taking and eventual crises. While Graziani's approach abstracts from individual behaviors and crises, Minsky emphasizes the role of uncertainty and speculative behavior. The article concludes by showing that integrating these two perspectives into a three-industry SFC dynamic model offers a comprehensive understanding of the interplay between money circulation, production conditions, and financial instability in capitalist economies.
This article analyzes Napoleoni's interpretation of Keynes. The first section will explain Napoleoni's adoption of Hick's and Klein's formalization of Keynes on the ground of his methodological standpoint, according to which simultaneous equations were the suitable tools for accounting for the interdependence between economic variables in a complex system. This approach will be confronted with Pasinetti's sequential and causal interpretation of Keynes, which Napoleoni addressed in the Discorso sull'economia politica. Moreover, Keynesian policies were seen by Napoleoni as the necessary condition for bringing about a 'purely capitalistic economy', capable of efficient reproduction and delivered from the rentiers' appropriation of a share of the social surplus. Faithful in this respect to Keynes's own formulation in the General Theory, Napoleoni stressed, against the post-Keynesian perspectives defended, among the others, by Graziani, the existence of a distributive constraint at full employment and the possibility for workers to affect, at that point, their real wages, thereby impacting the level of employment and the rate of accumulation. The last part of the article will be dedicated to Napoleoni's convergence, after he had given up the attempt to rehabilitate Marx's theory of value, to the emancipatory perspective depicted in the Economic Possibilities for our Grandchildren.
I look at Napoleoni's and Graziani's theoretical contributions from the vantage point of the 1970s. From there, I look both backwards and forward to the evolution of their respective systems of thought. The choice of the 1970s is not due only to theoretical reasons-because those were crucial years for the development of their respective systems of thought; but, also, to autobiographical reasons-because that was the decade when, in succession, I met them. After presenting some personal recollections of the periods when I was their student, I address some theoretical issues in two sections, respectively devoted to Claudio Napoleoni and Augusto Graziani. I mostly look at their analyses of capital-its nature, accumulation and valorization-because this was, in my opinion, the main focus of their theoretical interests.
This short article is an introductory note for a special journal issue on the writings of two towering intellectuals-Augusto Graziani and Claudio Napoleoni-whose writings helped to build and define important features of post-World War II Italian political economy. It provides a synopsis of their respective contributions and how their ideas differed and yet intertwined.
The 1985 Discorso sull'economia politica marks a turning point in Claudio Napoleoni's theoretical path. Having abandoned any attempt to rethink Marx through his own categories, Napoleoni finds a new theoretical horizon in a Heideggerian-oriented philosophy centered on the question of technique. This shift led Napoleoni to reinterpret the Marxian "material subsumption of labour under capital" as the "disappearance of the subject" and to see this disappearance of the subject as the ultimate result of the "essence of technique", which in turn was ultimately interpreted as the "essence of the subject". At this point, the necessary liberation became, for Napoleoni, the liberation of human beings from their subjective approach to the world. Through a comparison with the Lezioni sul capitolo sesto inedito of 1971 and a critique based on an interpretation of Marx that maintains a subjective perspective but avoids a subjectivist and productivist approach, the article aims to show: (1) that the thesis of the disappearance of the subject is the ultimate outcome of abandoning the link between value and labor in the field of economic theory; (2) that this evolution in Napoleoni's thinking, while on the one hand providing him with the opportunity to raise extremely important and topical issues about the relationship between human beings and the world, on the other hand forces him into a dead end from both a theoretical and a practical point of view; (3) that a revival of the project to redefine and reinterpret Marx's labor theory of value, begun by Napoleoni in the early 1970s, is potentially capable not only of refuting the criticisms of the Marxian perspective advanced by Napoleoni himself in the 1980s, but also of providing more convincing and practicable answers to the very questions he raised in the context of the Heideggerian turn.
