The monetary circuit for the common good

Louis-Philippe Rochon, Sergio Rossi and Guillaume Vallet

Chapter 7 in Central Banking, Monetary Policy and the Common Good, 2026, pp 131-145 from Edward Elgar Publishing

Abstract: This chapter focuses on the common good in both economic theory and practice, with a particular attention to the workings of the monetary circuit that begins when banks open credit lines to any kind of borrowers. The first section defines the common good with a survey of the relevant literature in mainstream economics, pointing out the flaws of this approach as regards the importance of the common good. The second section presents the heterodox conception of the common good in economic analysis and policymaking. In particular, this section explores the monetary policy contribution to the common good – in terms of full employment, financial stability, income and wealth distribution, and ecological transition. The third section expands on this with a monetary circuit approach that explains the prominent role of banks in contributing to the common good as defined in the previous section. The conclusion briefly summarizes the major points raised in this chapter from a political economy perspective.

Keywords: Common good; Monetary circuit; Monetary policy (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035348299
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