Wiley: The American Journal of Economics and Sociology: Table of Contents

Macroeconomic Stability in Economic Community of West African States: Direct and Indirect Effects of Financial Development

Issa Segda, Mahamadou Diarra — Wed, 03 Jun 2026 02:05:23 -0700

ABSTRACT

This article examined the direct and indirect effects of financial development on macroeconomic stability as measured by the volatility of GDP per capita in ECOWAS over the period 1981–2020. Unlike previous studies that use the standard deviation of the variables to measure volatility, this study considers the standard deviation of the random component extracted from the estimation of a first-order autoregressive process for the variables. Using CS-ARDL modeling to account for the characteristics of our panel, the empirical results reveal that financial development, measured by domestic credit to the private sector, has a direct negative and significant effect on growth volatility in the ECOWAS region in the long run. In addition, financial development has an indirect effect on macroeconomic stability through its effects on real and monetary shocks. It attenuates real shocks and, conversely, is a source of amplification of the effects of monetary shocks on macroeconomic volatility in ECOWAS. The policy implications suggest that focusing on financial development is a way for ECOWAS policymakers to reinforce the macroeconomic stability of the zone. It is also crucial to promote credit diversification by encouraging banks to support promising and resilient sectors while exercising greater prudence in the management of monetary policy.

“Do‐It‐Yourself” Target‐Date Funds and Retirement Investing

Christopher M. Duquette — Sat, 30 May 2026 01:46:30 -0700

ABSTRACT

Target-date funds were introduced three decades ago for retirement-investing purposes and now hold more than $4 trillion in assets. They are often the default in companies' 401(k) retirement plans. The annual management fees on these funds have been declining and now average 0.29%. While the decline in target-date fund fees is to be welcomed by investors, those annual fees can compound to erode investors' returns over the decades-long time horizon involved in investing for retirement. Here, it is shown that an alternative is for investors to construct a portfolio of lower-fee index funds that can be managed in such a way as to mimic the operation of a target-date fund, with near-zero fees. This low-fee “do-it-yourself” alternative to investing in target-date funds has the potential to upend the target-date fund industry.

Economic Valuation of Renewable Transport Fuels: Evidence From Solar Fuel Willingness to Pay in Quebec, Canada

Kpanoga Kolombia — Sat, 16 May 2026 07:54:10 -0700

ABSTRACT

The transport sector is one of the largest contributors to global greenhouse gas emissions, making it a key priority for climate mitigation policies. In this context, renewable fuels represent a promising complementary pathway to transport electrification, particularly due to their compatibility with existing internal combustion engine infrastructure. However, their large-scale deployment entails significant economic costs that are likely to be transferred to consumers, making public acceptance and willingness to pay (WTP) critical for policy design and implementation. This study estimates Quebec households' WTP for the adoption of renewable fuels, with a particular focus on solar fuels produced through artificial photosynthesis. The analysis is based on the contingent valuation method using a payment card format combined with a dichotomous choice question. Data were collected through an online survey of 367 respondents. To address potential econometric issues arising from zero and protest responses, a two-step Heckman selection model is employed. In addition, robustness checks explicitly include protest responses in the estimation sample to assess the sensitivity of results to alternative treatment of non-purchase motivations. This allows for a more nuanced distinction between true zero valuations and objections to the payment vehicle or policy design. The results show a positive but heterogeneous WTP. In the baseline specification excluding protest responses, non-parametric estimates range from CAD 0.17 to CAD 0.28 per liter, while parametric estimates adjusted for selection bias range from CAD 0.38 to CAD 0.42 per liter. When protest responses are included, non-parametric estimates decrease to CAD 0.10–0.27 per liter, whereas parametric estimates slightly increase to CAD 0.41–0.45 per liter, indicating the overall robustness of the econometric correction. Econometric findings indicate that the decision to pay is primarily driven by attitudinal factors, particularly climate change perception and trust in government climate policy, whereas the level of WTP is mainly influenced by socioeconomic characteristics and environmental engagement. The significant role of institutional trust and perceived policy credibility highlights the importance of non-economic determinants in shaping support for energy transition policies. From a policy perspective, the results suggest generally favorable but conditional public acceptance of renewable fuels in Quebec. While they provide indicative support for financing mechanisms such as fuel taxes or dedicated R&D funds, these findings should not be interpreted as direct evidence of political feasibility. Instead, they reflect a stated preference in a hypothetical context, where acceptance is strongly mediated by trust in institutions and perceived policy effectiveness. These elements are crucial for the design of socially acceptable and credible low-carbon fuel policies.

Tipping the Balance: NCAA Labor Restrictions, Mobility, and Productivity

Nathan Ashby, Miguel Ramos — Mon, 11 May 2026 05:31:19 -0700

ABSTRACT

The NCAA's 2021 relaxation of transfer restrictions created a large institutional shift in athlete mobility. Using NCAA Division I men's and women's basketball data from 2008 to 2025, we examine how this policy change affected transfer volume and sorting across programs. Transfers increased by 78% for men and 116% for women in the 4 years following the reform relative to the 4 years prior. Movement shifted toward Division I-to-Division I transfers, and descriptive evidence indicates stronger sorting across conference tiers. The mean player efficiency scores (PER) of transfers received by top-tier programs increased, particularly for women, consistent with improved matching following the reduction in mobility frictions. Although the analysis focuses on observed movement rather than compensation, these patterns are consistent with possible underlying differences in total athlete compensation between programs. Limited data on athlete-level NIL compensation preclude direct estimation of price effects, leaving this as an important direction for future research.

Innovative Field Experiments: Regional Currencies With Built‐In Negative Interest

Christian Gelleri — Thu, 07 May 2026 05:24:26 -0700

ABSTRACT

Silvio Gesell's concept of “rusting money,” developed in the late 1890s, aimed to stabilize economic cycles through state monetary policy. He proposed a controlled money supply to prevent inflation and stimulate circulation to counteract deflation. Gesell's ideas evolved with insights from Georg Friedrich Knapp's Chartalism, emphasizing the state's role in managing money through taxation and investment. His theories gained traction during the 1929 economic crisis, leading to the establishment of the WÄRA exchange in Erfurt, which experimented with currency featuring negative interest rates. Despite initial success, government bans halted these experiments. Interest in Gesell's ideas resurfaced in the 1990s and 2000s with the emergence of mutual credit and convertible local currencies, focusing on community building and ecological transformation. These modern initiatives blend social ideals with monetary programming, promoting cooperation over competition and aiming to enhance social prosperity within ecological limits. The goal is to foster a sustainable economy that benefits all members of society. With the help of the quantity theory, the quantitative effects of the regional currency Chiemgauer are examined and critically discussed.

Silvio Gesell and the Creation of Macroeconomics in Argentina: National and International Impact

Carlos Fernando Louge — Tue, 05 May 2026 02:33:24 -0700

ABSTRACT

Economist and entrepreneur Silvio Gesell was the legitimate creator of the subject of macroeconomics as an autonomous discipline, the driving force behind the abandonment of the fixed and rigid gold standard in Argentina (which was in force until 1899) as well as a legislative reform package known as the “Tornquinian Reform.” That reform in monetary theory replaced the “theory of value” with the “theory of prices” and promoted the use of a general price index as a substitute for the previous gold-based system of measuring prices. This reform led to international awareness of Gesell's economic theories due to their great success in Argentina. His ideas were also the foundation of subsequent Keynesian economic theory, the basis for economic development in the 20th century throughout the world to the present day. The innovation and technical modernization of Gesell's analysis played a key role in the reform of the international monetary system through its influence on J. M. Keynes' BANCOR proposal which was based on Gesell's IVA model. Other key concepts pioneered by Gesell were the use of negative interest rates and stabilizing monetary velocity to eliminate speculative, financial, and economic bubbles and to transform economic development into a stable and predictable process. After having been ignored for decades, Gesell's impact is becoming a subject of widespread study in recent years.

Strange? Unduly Neglected? Prophet?

Josh Sidman — Tue, 05 May 2026 02:16:09 -0700

The American Journal of Economics and Sociology, EarlyView.

Issue Information

Mon, 04 May 2026 05:30:28 -0700

The American Journal of Economics and Sociology, Volume 85, Issue 3, Page 297-302, May 2026.

Technology Licensing Versus Cannibalization, and Consumers' Welfare in Vertical Product Quality Market

Rui Yu, Leonard F. S. Wang, Di Wu — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

This paper investigates the strategy choice of a high-quality firm confronted with the entry of a low-quality competitor in vertical product-quality difference markets. We find that due to asymmetric market power, the high-quality firm may prefer quality licensing over cannibalization as its optimal strategy. Fixed-fee licensing contract has the potential to enhance consumer surplus and boost the profits of both firms, making it a potentially optimal choice for the high-quality firm to license its technology to the low-quality firm. Our study offers insights on the optimal strategy for a high-quality firm when confronted with the presence of a low-quality competitor.

Dynamic Volatility Spillovers and Risk Transmission Between Oil, Gold, and G7 Markets: A Crisis Perspective

Aziz Ullah, Mahfuzur Rahman, Muhammad Irfan, Ilhan Ozturk — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

This study examines the volatility spillovers and interconnectedness among oil, gold, and G7 equity markets during three distinct periods: calm period (CP), natural health crises (NHC), and war crises (WC). It analyzes daily data from January 2010 to April 2024, utilizing asymmetric BEKK-GARCH and Time-Varying Parameter Vector Autoregression (TVP-VAR) approaches. Our findings reveal significant spillover effects, with oil markets exhibiting stronger negative impacts on G7 equities during crises compared to gold. Notably, oil acts as a net risk transmitter across periods, while gold serves as a defensive and safe-haven asset, particularly during NHC. The hedging effectiveness analysis indicates that gold-G7 portfolios offer superior diversification, while oil-G7 pairs provide cost-effective hedging strategies, with France emerging as a key reference point. The pairwise net connectedness analysis identifies the USA, Japan, and Italy as primary shock transmitters during WC, while Canada, France, Germany, and the UK primarily function as shock recipients. Time-varying spillover results highlight increased market interconnectedness during crises, emphasizing the vital role of commodity markets in risk management. These findings provide actionable insights for portfolio managers facing crises, enabling them to design effective hedging and diversification strategies.

Is Mr. Smith Afraid to Leave Washington? Congressional District Gun Homicides and Legislator Absenteeism

Steven B. Caudill, Franklin G. Mixon Jr, Fady Mansour — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

The impact of violent crime has been shown to extend to business confidence, the timing and types of employment, and investments in human capital. The impact of violent crime on human behavior also potentially touches upon whether U.S. Representatives perform their legislative responsibilities or instead engage in shirking behavior. More specifically, the current political debate surrounding violent crime in Washington, D.C., gives rise to an interesting question: Do U.S. Representatives who reside in and represent notably dangerous Congressional districts view the nation's capital as a refuge from the violent crime that is persistent in those districts? To the extent they do, one would predict that the rates of vote-skipping by U.S. Representatives from notably dangerous Congressional districts would be lower than those realized for all other U.S. Representatives. Using vote-skipping (i.e., legislator shirking) data from the 118th Congress, this study undertakes such an investigation, finding that representatives from notably dangerous Congressional districts tend to skip almost 0.9%-points fewer votes than representatives from all other Congressional districts. This impact represents almost 35% of mean percentage of votes skipped across all legislators in the U.S. House during the 118th Congress.

A Bibliometric Analysis of The American Journal of Economics and Sociology: Identifying Key Contributors, Influential Articles, and Scholarly Impact

Don Capener — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

This study conducts a bibliometric analysis of The American Journal of Economics and Sociology (AJES) to identify and quantify the impact of its key contributors and most influential publications. Using a comprehensive dataset drawn from scholarly databases, we analyze citation metrics to identify both the most impactful authors (based on total citations) and the most-cited individual articles. The findings reveal a core group of high-impact contributors and a thematic alignment in high-impact articles that shape the journal's discourse over 25 years. This quantitative portrait offers insights into the intellectual structure and scholarly community of AJES, highlighting the authors and articles central to its rising reputation and long-standing mission.

Illegal Immigration Control and Wage Inequality

Jiancai Pi, Xinyi Liu — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

This article investigates the effects of government regulation over illegal immigration on wage inequality through the general equilibrium approach. In the basic model of the short-term analysis, increased control over illegal immigration will affect the skilled wage rate depending on the elasticity of substitution between capital and illegal immigrants in the urban informal sector, and will influence the domestic unskilled wage rate through both the formal-sector skill-intensity channel and the informal-sector substitution channel between domestic unskilled labor and illegal immigrants. In the long-term analysis, if the urban formal sector is more capital-intensive than the urban informal sector, stricter immigration control will exacerbate wage inequality. In the two extended models, the results of the models may be similar to or different from those in the basic model.

Pandemic Pets: How the Demand for Dogs Affects In‐Home Domestic Violence During COVID‐19

Erika A. Davies Rodriguez, Zachary Rodriguez — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

During the COVID-19 pandemic, Dallas County, Texas implemented a 52-day shelter-in-place order, forcing residents to remain at home. Using daily crime reports and animal shelter intake data, we study the effect of household pet outflows on in-home violence. We find that the shelter-in-place order is associated with increased in-home assaults, particularly against women. The way pets exit households matters, as we find fostering pets mitigates in-home violence, while owner surrenders are associated with increased assaults during the order. These results highlight pets as a previously understudied factor in domestic violence dynamics and suggest that coordinated policies integrating animal shelters, women's shelters, and law enforcement could improve safety. By facilitating safe pet placement, such interventions may allow victims to leave abusive households more freely, reducing family violence and protecting both humans and animals.

Religiosity as Resilience: Rural–Urban Divorce Responses to Coal‐Fired Power Plant Closures

Tuyen Pham, G. Jason Jolley, Magda Sutherland — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

This study examines the relationship between coal-fired power generator shutdowns and county-level divorce rates in Ohio using a two-way fixed effects model. The results show that reductions in coal-fired generating capacity have no measurable impact on divorce rates in non-rural counties but are associated with significantly higher divorce rates in rural counties. This rural-specific effect highlights the heightened social vulnerability of communities with less diversified labor markets, where economic shocks in male-dominated industries can have broader consequences for family stability. Counties with higher levels of religious adherence tend to have lower divorce rates, and this protective effect is stronger in rural counties where religious institutions play a central role in community life. Demographic patterns further indicate that rural counties with larger young adult populations experience higher divorce rates, while the share of older adults is not significantly related to divorce once other controls are included. Consistent with prior literature showing that transitions away from carbon-intensive industries create both winners and losers, we find that energy sector transitions can generate uneven social impacts in rural communities that extend beyond employment and income. These findings contribute to and inform emerging just transition scholarship by underscoring the importance of localized social dynamics and family stability when designing equitable transition policies.

State COVID‐19 Policy Configurations and Registered Nurse Employment Recovery: A Mixed‐Set Qualitative Comparative Analysis of U.S. States and the District of Columbia (2021–2022)

Maggie Foley, John Shaw, Caitlin Sockbeson, Karen Chin, Guohua Ma — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

RN employment rebounded unevenly across the states of the U.S. after the acute phase of COVID-19. We examine how 2021 state COVID-19 policy mixes across six domains were associated with registered nurse (RN) employment recovery in 2022: telehealth expansion, early prescription refill flexibility, cost relief (cost-sharing + vaccine cost relief), paid sick leave, mask mandates, and vaccine mandates. Using 51 jurisdictions (50 states plus the District of Columbia), we apply Qualitative Comparative Analysis (QCA) in a mixed-set design, coding policy domains as crisp-set membership indicators (0/1) based on documented adoption in 2021 and calibrating the outcome as a set-membership score from the percent change in RN employment from 2021 to 2022 (p25/median/p75 anchors). At a consistency cutoff of 0.70, we identify multiple configurations sufficient for high recovery (solution consistency = 0.809; total coverage = 0.444), consistent with equifinality. Access-oriented tools (telehealth expansion and refill flexibility) recur across several high-recovery configurations, while mandates and paid sick leave vary across pathways. The empirical results are robust to stricter specifications, including a higher consistency cutoff (0.75), a higher frequency threshold (Freq ≥ 2), and alternative calibration anchors (20/50/80). In contrast, low recovery (1-Y) is characterized by different sufficient configurations (solution consistency = 0.965; total coverage = 0.416), underscoring causal asymmetry. We interpret these results as configuration-level associations rather than causal estimates and highlight how feasible access policies interact with mandates and workforce protections within broader state policy mixes linked to RN employment recovery.

Effect of Foreign Direct Investment on Structural Change in West African Economic and Monetary Union Countries

Mahazou Kindo — Mon, 04 May 2026 05:30:28 -0700

ABSTRACT

Structural change is a dynamic process in which production growth is accompanied by qualitative transformations in the production and employment structures. From this perspective, can foreign direct investment (FDI) influence this process? This paper analyzes the effects of FDI on structural change in West African Economic and Monetary Union (WAEMU) countries. To do this, we used an autoregressive distributed lag (ARDL) model, estimated via the pooled mean group (PMG) method on a sample of eight WAEMU countries with data covering the period 2000–2022. The results reveal that the effects of FDI on structural change are profound but slow. In the long term, FDI acts as a catalyst for structural change in WAEMU countries by significantly increasing productive value added in the industrial and manufacturing sectors without generating significant job creation. However, in the short term, FDI has no significant effect on structural change. Furthermore, human capital, institutions, inflation and trade openness contribute positively and significantly to long-term structural change, whereas economic growth and domestic investment appear to hinder this change. These results suggest the need for massive FDI attraction strategies, especially those targeted toward high value-added sectors capable of generating technology transfer and job creation. It would also be advisable to strengthen policies aimed at improving workforce skills and endogenous capacities, such as domestic investment, human capital and institutions, to create an environment conducive to endogenous structural change and maximize the positive spin-offs of FDI.

Consumers' Willingness to Pay for Solar Fuel Adoption in Quebec, Canada: Evidence From a Discrete Choice Experiment

Kpanoga Kolombia — Wed, 29 Apr 2026 00:43:10 -0700

ABSTRACT

This study investigates consumer preferences for renewable fuels in Quebec, with a particular focus on a solar fuel produced through artificial photosynthesis. Using a discrete choice experiment (DCE) and both conditional logit (CL) and random parameters logit (RPL) models, we estimate marginal willingness to pay (MWTP) for key fuel attributes, including price, accessibility, environmental performance, and the share of solar fuel in gasoline. The analysis is based on a sample of 627 respondents, yielding 9405 choice observations. The results reveal a strong and statistically significant preference for renewable fuels, with substantial heterogeneity in consumer preferences. The RPL model outperforms the CL specification in terms of fit and behavioral realism, highlighting the importance of accounting for unobserved preference heterogeneity. Price has a consistently negative and highly significant effect on choice probability, while accessibility, environmental performance, and fuel mix are positively valued. MWTP estimates derived from the preferred RPL specification indicate that respondents are willing to pay, on average, $0.56/L for improvements in fuel mix, $0.58/L for accessibility, and $0.59/L for environmental performance. The alternative-specific constant reflects a strong intrinsic preference for renewable fuels, with an associated MWTP of $1.62/L, leading to a total MWTP of $3.37/L. In contrast, the conditional logit model produces lower and less stable welfare estimates, with a total MWTP of $1.58/L, suggesting that restrictive preference assumptions lead to an underestimation of welfare measures. Robustness checks using a mixed logit model in willingness-to-pay space confirm these findings and further support the stability of the estimated preferences. The results show consistent positive valuation of fuel mix and accessibility, as well as strong evidence of preference heterogeneity across individuals. Sociodemographic interactions reveal that women, more educated individuals, and urban residents exhibit stronger preferences for renewable fuels, while highly motorized households display behavioral inertia. These findings underscore the importance of heterogeneity in shaping energy transition preferences. Overall, the results suggest that renewable fuel adoption in Quebec is driven by a combination of economic, environmental, and behavioral factors. The findings provide important insights for designing targeted and socially inclusive policies to support the transition toward low-carbon transportation systems.

Preface

Clifford W. Cobb — Wed, 29 Apr 2026 00:29:32 -0700

The American Journal of Economics and Sociology, EarlyView.

Adam Smith's “Two Distinct Benefits” From Foreign Trade

William D. Gerdes — Tue, 21 Apr 2026 21:39:11 -0700

ABSTRACT

Adam Smith's two distinct benefits from foreign trade were offered to dissuade others from adopting the mercantilist view that there is one principal gain from trade: the importation of money. Although Smith's two benefits received considerable attention in the literature, there was no consensus on what Smith meant by his two benefits. This paper offers a new interpretation of those benefits. Smith's first benefit is a micro benefit, with its impact on individuals. That benefit is the subjective value creation that results from voluntary international exchange. Both parties to the exchange experience an improvement in their living standard. Smith's second benefit is a macro benefit, impacting the economy at large. International trade extends markets and allows for production on a larger scale. A greater division of labor increases labor productivity and increases the national product. This increase in aggregate production is the second benefit from foreign trade. What makes this interpretation of Smith's two benefits attractive is the evidence that Adam Smith concurs with the interpretation.

Gesell: The Revolution Still Waiting to Happen Taking Stock of an Anarchistic Dream After 30 Years of Militancy

Guido G. Preparata — Thu, 16 Apr 2026 01:39:20 -0700

ABSTRACT

This paper reassesses the legacy of Silvio Gesell and the fate of the anarchistic monetary reform tradition inspired by Pierre-Joseph Proudhon. It argues that Gesell's proposal of “perishable money” (demurrage) provides the missing theoretical key to the long-standing problem of interest and rent, reframing them as institutional mechanisms of systemic rent extraction. The article reconstructs the intellectual genealogy leading from the Proudhon–Bastiat debate to Gesell's synthesis, and examines how Marxism, marginalism, Keynesianism, and libertarianism successively marginalized or neutralized this tradition. It contends that modern economics has obscured the political nature of money and the role of banking in sustaining oligarchic structures of power. The paper also reflects on the author's three decades of advocacy for Gesellian reform and the persistent institutional resistance encountered. Despite renewed interest in negative rates, complementary currencies, and cryptocurrencies, the essay concludes that the radical institutional implications of Gesell's project remain largely unacknowledged, leaving his “revolution” still waiting to happen.

Gesell's Stamp Scrip in the 21st Century: Deeply Negative Interest Rates at Last?

Willem H. Buiter — Wed, 15 Apr 2026 03:07:02 -0700

ABSTRACT

Gesell's advocacy of possibly deeply negative interest rates on money to stimulate aggregate demand has become highly relevant between the Great Financial Crisis (GFC) of 2007–2010 and the inflationary recovery from the Covid Pandemic in 2021. Central bank policy rates were constrained by the effective lower bound (ELB) on nominal interest rates created by the existence of a monetary asset with a zero rate of interest—paper currency and coins—with low carry costs. Large-scale expansions in the monetary base associated with Quantitative Easing (QE) to stimulate aggregate demand did little to boost the economy at the ELB, confirming another proposition of Gesell. QE to support or restore the effective functioning of systemically important financial markets can make sense. A recurrence of episodes where the ELB is preventing monetary policy from stimulating aggregate demand is certainly possible. Modern digital technology makes it possible to issue a new form of widely used money capable of carrying any size interest rate—negative or positive. Zero interest coin and paper currency would be abolished. A retail central bank digital currency, managed either in a centralized manner or on a permissioned or permissionless blockchain, that can be used for both online and offline transactions and without size caps on accounts and transactions, would eliminate the ELB and restore the ability of monetary policy to stimulate aggregate demand when this requires a possibly deeply negative interest rate on money. It is time to create this 21st-century version of Gesell's Stamp Scrip.

Silvio Gesell: Pragmatic Businessman and Economic Visionary

Santiago Gesell — Fri, 10 Apr 2026 03:14:57 -0700

ABSTRACT

This article provides a biographical sketch of Silvio Gesell's life from an insider perspective. Recounting Gesell's birth, family life and education, the narrative describes how the multilingual, multicultural environment he grew up in, as well as an innate tendency toward independent thought, gave him the equipment to succeed in international business. Running a business in Argentina amidst the turbulence of 1890s enabled him to develop a deep understanding of economics and money. Although the unconventional nature of his economic analysis caused it to be largely ignored at first, Gesell worked assiduously to spread his ideas. His success in business provided him with the financial resources which would allow him to develop his ideas and proposals, which he promoted on both sides of the Atlantic, going back and forth between Argentina and Europe throughout his life. Ever the pragmatic man of action, Gesell even joined a socialist government in Bavaria as economics minister (despite having little ideological common ground with the government he served in). After the government fell, Gesell was imprisoned along with other leaders and mounted a successful self-defense which resulted in him being exonerated and freed. One is left to wonder if Gesell had any inkling of the significance of ideas, since most of the appreciation of his work came long after his death in 1930.

Silvio Gesell on Money: The Problem and the Solution

Josh Sidman — Thu, 09 Apr 2026 04:36:37 -0700

ABSTRACT

Most discussions about money begin by identifying three core functions that money performs—i.e., medium of exchange (MoE), unit of account (UoA) and store of value (SoV). Silvio Gesell's revolutionary insight was that the MoE and SoV functions are inherently incompatible. Regardless of the specific design of money—whether backed by gold, unbacked fiat or crypto—any form of money that is intended to be used as a vehicle for saving will systematically fail to perform the MoE function. As Gesell put it, “money cannot be… simultaneously spur and brake.” If we must choose between money's functions—and Gesell told us we must—clearly the MoE function is the one we should choose, since it is the fundamental precondition of an advanced division of labor system, upon which all of our lives depend. Therefore, Gesell said, including the SoV function in money's design is a fundamental mistake that gives rise to a variety of harmful consequences. After laying out a clear, logical analysis explaining how this flaw in the design of money is the root cause of problems including poverty, ever-increasing wealth inequality, inflation and deflation and recurring economic crises—Gesell offered a simple yet radical solution: “I therefore propose a complete separation of the medium of exchange from the medium of saving.” His proposed methodology for accomplishing this is demurrage—a planned, consistent, gradual decline of the purchasing power of money. The purpose of this reform is to make money unsuitable for use as a vehicle for saving and thereby make it a reliable MoE that will perform its essential function without causing all of the aforementioned problems. He explained how doing so will completely transform the economy, finally allowing the free-market system to deliver on its promises of robust wealth creation, equitable distribution of wealth and economic stability.

Web3 and Demurrage Money

George Lovegrove — Thu, 02 Apr 2026 23:05:12 -0700

ABSTRACT

This article explores the application of demurrage money, a concept developed by Silvio Gesell, into Web3. Demurrage money, designed to discourage the hoarding of currency and prevent economic stagnation and concentrations in wealth, offers a potential remedy for the problems of traditional fiat and gold-backed monetary systems. The article presents an overview of Web3, highlighting its core principles such as being decentralized, permissionless, community governed, and programmable. It critiques the limitations of current Web3 cryptocurrencies, particularly Bitcoin and other networks that have emerged since. By design these networks enable excessive asset storage and face sustainability challenges such as governance centralization and inadequate ecosystem funding. The article proposes that the implementation of a network coin tax, as a form of demurrage, would help to incentivize productive economic activity, decentralize coin ownership, provide reliable funding for node operators and ecosystem development and create opportunities for large-scale public goods funding. Various monetary supply models are discussed, evaluating their compatibility with demurrage systems. The article concludes that demurrage based economic systems could lead to more resilient, equitable and sustainable Web3 ecosystems that have significant potential for making a global societal impact.

Henry George and Silvio Gesell: The Odd Couple

Dirk Loehr — Thu, 02 Apr 2026 03:52:46 -0700

ABSTRACT

Henry George (1839–1897) and Silvio Gesell (1862–1930) developed distinct yet overlapping economic reform agendas. Both advocated land reform, free markets, and rejection of protectionism, but differed sharply on money, interest, and taxation. George saw land value taxation as the sole means to fund public goods and curb speculation, while Gesell proposed demurrage money to eliminate capital scarcity and cyclical crises, complemented by public land leasing. This article compares their theoretical foundations, critiques, and enduring influence. It situates both thinkers in the context of modern developments—such as infrastructure self-financing, central bank debates on negative interest, and evolving land-lease practices—while assessing complementarities and blind spots. The analysis suggests that integrating Georgist and Gesellian insights offers a more comprehensive reform program addressing monetary, fiscal, and land-use dimensions for equitable and efficient economic systems.

Silvio Gesell: Beyond Left Versus Right

Josh Sidman — Wed, 01 Apr 2026 03:43:53 -0700

ABSTRACT

Many people think of the range of economic ideas as lying along a linear spectrum with capitalism on one end and communism on the other, otherwise referred to as Left versus Right. This is an artificially narrow framework, which has a variety of harmful consequences. It implies that there are only two possible directions in which we can move in order to solve our problems. It also divides people into two opposing camps, each of which refuses to engage in constructive criticism of their “side.” And it excludes any perspectives, which do not fit within that artificially narrow framework. Silvio Gesell developed an analysis of the problems with the capitalistic status quo, which cannot be located within the Left-vs-Right spectrum. If his analysis was correct, the first thing that must be done in order to create the conditions necessary to implement his proposals is to dismantle the framework itself. In order to do this, we must revisit some basic terms and refine our definitions of capitalism, the “free-market system,” socialism and Marxism. Once we have done so, it becomes clear that, far from being opposed or mutually exclusive, the ideals of free markets and of socialism are in fact compatible and complementary. This is, of course, completely contrary to conventional economic thinking. That does not reflect any analytical shortcomings of Gesell's perspective. Rather it highlights the fact that the framework within which we think about the subject of economics is one of the most important obstacles to finding and implementing the solutions we need to build a more robust, fair and stable economy.

Begetting Silvio Gesell in the Modern Economy: A Marriage of Frederick Soddy and Kenneth Boulding

Ahmed Anwar — Fri, 27 Mar 2026 06:04:28 -0700

ABSTRACT

In the Natural Economic Order, first published in 1916, Silvio Gesell warned against a fiat monetary system that in place of controlling the circulation of money with demurrage, sought to manage the system by accommodating demand for liquidity. We have been in such a system since 1971 and it has survived these 55 years without collapsing in the way that Gesell predicted. We will explore how Gesell's concerns apply to the modern system of monetary management and will argue that he has been right about the process but that we have not yet reached his inevitable end. We will also expand on Gesell with a marriage of Soddy and Boulding to help understand wider implications of monetary management in the modern economy.

Designing Money for a Natural Interest Rate of Zero—An Exergy‐Based Monetary System

Lothar Krätzig‐Ahlert, Felix Fuders — Thu, 26 Mar 2026 20:44:48 -0700

ABSTRACT

This paper proposes a new design for a monetary system grounded in the laws of physics and in which the rate of interest would converge to zero as envisioned by Silvio Gesell. Drawing on the first and second laws of thermodynamics, the concept of exergy is introduced as a biophysical numeraire that directly links monetary circulation to real productive activity. The proposed framework replaces the exponential growth logic inherent in interest-bearing money with a logistic growth model reflecting the finite carrying capacity of ecological systems. Money creation is strictly limited by the annually harvested exergy used in economic production and implemented through a transparent institutional procedure. Since exergy cannot reproduce itself, interest-bearing money creation becomes physically infeasible, leading endogenously to a natural interest rate of zero. The paper discusses implications for economic stability, banking, investment behavior, and sustainability, arguing that an exergy-based monetary architecture would enable a stationary flow equilibrium without a systemic growth imperative.

Theories of Interest and Their Relation to the Gesell–Keynes Theory

Ahmed Anwar — Wed, 25 Mar 2026 23:28:32 -0700

ABSTRACT

We consider theories of interest as they relate to what we will call the Gesell-Keynes (GK) theory which is essentially a real theory of capital accumulation with a monetary constraint that arises because of a liquidity return on holding money. We give brief presentations of the neoclassical theory (Fisher), growth models (Solow and Ramsey), and monetary models of growth (Tobin and Sidrauski). The GK theory is a neoclassical theory of the return on capital with a liquidity return on money hindering the path to the growth theory steady state. The monetary growth models do address the GK liquidity return on holding money, and we will highlight a contrast here between how Gesell and Keynes relate to these with different models of the economy and their different solutions to the monetary constraint.

Gesell's Natural Economic Order as a Blueprint for a “Fairconomy” and a Sustainable Future

Felix Fuders — Wed, 25 Mar 2026 23:00:01 -0700

ABSTRACT

The unsustainable trajectory of modern economic structures, especially the growth imperative, and the increasing disparity in income distribution, both widely acknowledged as barriers to sustainability, are fundamentally linked to the existing monetary system. However, the scope of this issue extends beyond sustainability alone, encompassing unemployment, inflation, and recurring financial crises, which are all intrinsically tied to the structural framework of current monetary mechanisms. This article contends that true sustainability can only be achieved by transitioning from an artificially structured monetary system to a more natural alternative, as advocated by Silvio Gesell. Implementing such a system is essential for approaching the theoretical construct of “perfect competition”, which remains unattainable under existing financial paradigms, and for realizing what Max-Neef et al. (1991) describe as “development at human scale”, a model that prioritizes the fulfillment of fundamental human needs.

Is There a Growth Imperative Inherent in Our Financial System?

Felix Fuders, Milagros Guerrero — Tue, 24 Mar 2026 20:50:05 -0700

ABSTRACT

In the article “Gesell's Natural Economic Order as a Blueprint for a ‘Fairconomy’ and a Sustainable Future” in this special issue, it was explained why and how our monetary system forces us to constantly increase economic output. However, whether or not there is in fact such a growth imperative inherent in our monetary system is a topic of ongoing debate in ecological economics and bio-economics, while conventional economic wisdom still outright rejects the concept entirely. This article categorizes into five groups the arguments often offered against the existence of a growth imperative inherent in our monetary system. It then discusses and discards each of the arguments. Using the case of Chile's forests and aquaculture management zones, it will be explained why this growth imperative applies to private and public goods alike. Even though a natural resource may be privately owned, this does not guarantee that the resource will not be overexploited.

Private Land Ownership: Tax or Socialize?

Dirk Loehr — Fri, 20 Mar 2026 02:05:20 -0700

ABSTRACT

This study compares the land reform concepts of Henry George and Silvio Gesell, both of whom rejected private appropriation of land rent as unjust. While George proposed to “hollow out” private land ownership through a comprehensive land value tax, Gesell aimed at full socialization of land combined with lease auctions and compensation of former owners through interest-bearing government bonds, embedded within his “free money” system. Gesell's approach represents a radical systemic reform requiring public ownership and involving high administrative costs, whereas George's model is incremental and tax-based but faces unresolved valuation and constitutional problems. The article highlights practical obstacles to both approaches, such as administrative complexity, auction distortions, and the integration of property taxation into multi-level fiscal systems. It also discusses the further development of the approaches, including conceptual tenders and self-assessment of land values. Ultimately, it concludes that a forward-looking land regime should combine elements of both thinkers—Gesell's socialization principles for high-value urban land and George's land value taxation for peripheral areas—while re-examining the doctrinal foundations of property law to achieve a just, sustainable, and institutionally coherent land order.