THE FUTURE OF MONEY Bernard A. Lietaer - library.uniteddiversity ...

an interest in accepting well- designed complementary currencies,
even from their own perspective.
At this point, the vast majority of central banks may not even have
noticed the phenomenon the current developments are still below the
radar beam of the official system. But that is just a matter of time. If
the Information Age creates more structural unemployment and,
therefore, more demand for complementary currencies, and as new
technologies will soon increase the means to implement them, an
explosion of complementary currencies could be expected (see
sidebar).
From a central bank viewpoint, the critical concern is the
relationship between complementary currencies and inflation. If
large-scale use of complementary currency fuels inflation,
legitimately they should block such development. However, if
complementary currencies are not creating inflation, they should not.
My thesis here is that well-designed complementary currencies do
not contribute to inflation, and can even be used to reduce
inflationary pressures on the national currency.
A good starting point for the relationship between money issuance
and inflation is Robert Lucas's synthesis in his recent Nobel Lecture:
'The prediction that prices respond proportionally to changes in
money in the long run, deduced by Hume in 1752 (and by many
other theorists, by many different routes, since) has received ample - I
would say decisive confirmation, in data from many times and
places.'
However, all this excellent work has invariably been based on the
implicit assumption that there is only a single currency system in a
country. For example, within that frame of mind, the appearance of a
second complementary currency may be interpreted as a simple local
increase in money supply. AU economists would immediately