‘Positive money: progressive solution or Trojan Horse?’ by Christian Etzrodt: a critical response

Giuseppe Fontana and Malcolm Sawyer

Cambridge Journal of Economics, 2025, vol. 49, issue 5, 1105-1109

Abstract: Etzrodt (Etzrodt, 2023) claims to offer an evaluation of the ‘Positive Money’ (PM) banking sector reform as set out in Jackson and Dyson (2012). A considerable part of the paper is a critique of Fontana and Sawyer (2016, 2017). This paper discusses what Etzrodt labels ‘the important economic issues’ (the mechanism that brings financial instability in the Positive Money proposal, and the role of the shadow banking system in modern economies), and the ‘biggest problem’ (the theoretical incompetence and lack of impartiality of Post Keynesian macroeconomists to assess the PM proposal) in Fontana and Sawyer. This paper has argued that Etzrodt misrepresents Fontana and Sawyer, and his critique is misplaced.

Keywords: Positive Money; Full reserve banking; Endogenous money; Financial instability; Shadow banking (search for similar items in EconPapers)
Date: 2025
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