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Money is money: The economic impact of BerkShares

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  • Matti, Josh
  • Zhou, Yang

Abstract

Community currencies are a popular way localities around the world pursue a sustainable economy. However, no studies look at the economic impact of community currencies using modern causal inference methods. We use the synthetic control method to examine the short and long-term effects of the popular community currency BerkShares on the number of businesses, unemployment rate, and per capita income in the county in which it circulates. The results suggest that BerkShares has not had a discernible impact either directly on businesses or indirectly on local economic conditions. Additionally, BerkShares has not impacted business dynamics in a measurable way. Results from the synthetic control method suggest that establishment births, deaths, expansions, and contractions figures following BerkShares are no different than what they would have been without the currency. Given its lack of discernible impact, the results serve as a caution for localities considering community currencies as an economic development strategy.

Suggested Citation

  • Matti, Josh & Zhou, Yang, 2022. "Money is money: The economic impact of BerkShares," Ecological Economics, Elsevier, vol. 192(C).
    • Handle: RePEc:eee:ecolec:v:192:y:2022:i:c:s0921800921003141
    DOI: 10.1016/j.ecolecon.2021.107255
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    More about this item

    Keywords

    BerkShares; Community currency; Local currency; Sustainable development; Synthetic control;
    All these keywords.

    JEL classification:

    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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