The Case for the Separation of Money and Credit

  • Romain BaeriswylEmail author


This paper argues that central banks could control consumer price inflation better by injecting money through lump-sum transfers to citizens, rather than by manipulating the credit market and interest rates. Lump-sum monetary transfers lead to less intersectoral distortion and less intertemporal discoordination than measures aimed at stimulating the credit market. They allow central banks to target inflation without building up financial imbalances.


Austrian business cycle theory Credit-money economy Lump-sum monetary transfers 

JEL Classification:

E30 E42 E58 B53 



The author thanks Katrin Assenmacher, Rafael Greminger, Hans-UeliHunziker, Carlos Lenz, Jonas Meuli, Pierre Monnin, Samuel Reynard, participants at the symposium held in honor of Professor Gerhard Illing in Munich, and especially Frank Heinemann, the editor, for their useful comments.


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Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.Swiss National BankZurichSwitzerland

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