Sustainable Finance Model


The current financial system appears to be fundamentally unstable. Lacking central coordination, decentralized money creation causes unjustified euphoric herd behavior of the many private banks, with then create monetary economic growth that is bound to suffer from boom-and-bust behavior.
The model experiments show that money creation by the government, according to a ‘money creation rule’ which is directed to price stability and / or employment, can stabilize the boom-bust cycles. At a constant price level, both the physical and the monetary production and consumption then follow a pathway of stable, continuous growth, which reflects the increased productivity which results from technical progress.

SFM-paper-Egmond-de-Vries-okt-2015