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On the Role and Place of the Central Bank Money Emission in Reproduction Processes

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  • A. Navoi

Abstract

The article analyzes the political economy essence of the money emissive activity of central banks. On the basis of the loan funds genesis and the law of circulation of value the conclusion is made that the central bank cannot participate in the creation of value, it only redistributes surplus value through the mechanism of unsecured paper money emission. The interest rate for the central bank loans, unlike commercial interest rate, has no value basis. So, the interest rate is defined by the norm of surplus value. The central bank, via lending its resources with discount, forms steady demand for its money. This model of monetary policy contains crisis potential as it creates unsecured paper money which finds application in numerous bubbles of assets formed worldwide. The revision of the emission institute role in modern reproduction processes is required. The central bank should concentrate on the emission of sound money, sending correct economic signals to subjects of the economy.

Suggested Citation

  • A. Navoi, 2009. "On the Role and Place of the Central Bank Money Emission in Reproduction Processes," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 5.
    • Handle: RePEc:nos:voprec:y:2009:id:875
    DOI: 10.32609/0042-8736-2009-5-118-128
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