Business, Legal & Accounting Glossary
Monetary reform is accounting reform that reaches more deeply into banking central bank, money supply and monetary policy. It affects how money is created and destroyed, and what constitutes a reliable measure of economic growth and measures of national income.
In the United States, the Federal Reserve and Department of the Treasury are responsible for these functions. Thus the term Treasury reform, which is a synonym but one that applies only to such reform of the US dollar.
While ensuring the independence from the government of the central bank or the creation of a currency board are practical monetary reforms that many countries have implemented (e.g. Bank of England) to combat inflation or currency speculation, many suggest that more radical monetary reform can assist in sweeping economic or social changes.
Many prominent economists have criticised the existing global financial institutions like the World Bank and International Monetary Fund and their policies regarding money supply, banks and debt in developing nations.
Some go further and suggest that wholesale reform of money and currency, based on ideas from green economics or Natural Capitalism would be beneficial. These include the ideas of soft currency, barter and the local service economy.
Many theorists (e.g. Robert Mundell) see a role for global monetary reform as part of a system of global institutions alongside the United Nations to provide global ecological management and move towards world peace.
Some (e.g. Henry Liu) argue that monetary reform is an important part of a move towards post-autistic economics.
While most mainstream economists favour monetary reforms to reduce inflation and currency risk and to increase efficiency in the allocation of financial capital, the idea of all-encompassing reform for green or peace objectives is typically espoused by those on the left-wing of the subject and those associated with the anti-globalization movement.
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This glossary post was last updated: 22nd March, 2020