Policy Note 2016/1 | January 2016

Complementary Currencies and Economic Stability

A complementary currency circulates within an economy alongside the primary currency without attempting to replace it. The Swiss WIR, implemented in 1934 as a response to the discouraging liquidity and growth prospects of the Great Depression, is the oldest and most significant complementary financial system now in circulation. The evidence provided by the long, successful operation of the WIR offers an opportunity to reconsider the creation of a similar system in Greece.

The complementary currency is a proven macroeconomic stabilizer—a spontaneous money creator with the capacity to sustain and increase an economy’s aggregate demand during downturns. A complementary financial system that supports regional development and employment-targeted programs would be a U-turn toward restoring people’s purchasing power and rebuilding Greece’s desperate economy.

Related Publications

Publication Highlight

Working Paper No. 876
Normalizing the Fed Funds Rate
The Fed’s Unjustified Rationale
Author(s): Flavia Dantas
October 2016

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