The paper aims to show the impact that a complementary currency may have on a national economy from a theoretical point of view. A system dynamics model is created to describe the mechanics of money issuance in capitalist economies as well as in economies where there is no inside money. As an example, the first outcomes of a barter network implemented in 2008 by the STRO foundation in El Salvador (called Punto Transacciones) are presented and analyzed. Finally, using data from a complementary currency experience in El Salvador the spending multiplier is calculated. The main result shows that there is a greater spending multiplier in digital community currencies systems than in regular money market. Although the magnitude of PT network is still negligible from a macroeconomic point of view, the result is a desired outcome which may help to cushion the impact of macroeconomic shocks on labour market, contributing to stabilize aggregate demand.
To cite this article: Groppa, O. (2013) ‘Complementary currency and its impact on the economy’ International Journal of Community Currency Research 17 (A) 45 – 57 <www.ijccr.net> ISSN 1325-9547 http://dx.doi.org/10.15133/j.ijccr.2013.005
After losing its lawsuit against a community bank issuing a community currency, the Central Bank of Brazil has just started a cooperation agreement with the National Secretary for Solidarity Economy of the Labour Ministry of Brazil to support and develop the current 51 community banks and their own social currency in order to reach about 300 by 2012, becoming an exemplary model. This world premiere central bank support associated with one of the highest amount of community currency systems of Latin America brought Brazil as a significant site of experimentation in this field. Furthermore, some daring innovations seem to confirm this position in a long-term future unless this normative control of a centralized institution decreases the creativity. Indeed, sustainable economic orientation still needs creative tools, associated to an ethical vision, to decrease material consumption dependence and increase post-materialist values exchange: community currency transformation to an effective grassroots innovation for sustainability, prosperity and democracy seems to be necessary.
Christophe Place Volume 15(2011) Special Issue D39-46
To cite this article: Place, C. (2011) ‘Community Currency Progress in Latin America (Banco Palmas)’ International Journal of Community Currency Research 15 (D) 39-46 <www.ijccr.net> ISSN 1325-9547 http://dx.doi.org/10.15133/j.ijccr.2011.019