Alternative Currencies, Bane or Boon?
Poster Number
48
Format
Poster Presentation
Faculty Mentor Name
Thomas Pogue
Faculty Mentor Department
Business Forecasting Center
Abstract/Artist Statement
From at least the 16th century to the space age, to the computer age, the world has been in an ever increasing trend towards to increasing globalization. This globalized world we live in is now extensively interconnected through trade, commerce, and communications, with multi-national operations characterized as increasingly interconnected and knowledge intensive economies. However, there exists a seemingly anomalous counter trend: localization. Localization comes in many forms ranging from “locavore” restaurants, to buy local movement and local currencies. This paper analyzes the potential economic costs and benefits of one of these features of localization: local currencies. These currencies help to encourage spending at specific, local locations within the city or region of its origin. A latest example of this phenomenon may be found in the city of Davis, California, and it’s “Davis Dollar’ instituted by Davis Dollars, a startup non-government organization. There are several pros and cons to be found in relation to having a local currency. This currency could, theoretically, allow governments such as Davis to gain macroeconomic decision policy independence, away from the United States Federal Bank. As a result of this independence, governments could influence consumer spending behavior, therefore affecting its trade deficits or surplus. On the flipside, instituting local currencies could bring about certain negative aspects. When spending is kept within the local economy, it reduces trade with neighboring cities and counties, and thus diminishes the benefits of trade for the region. As a result, these regions could have a smaller consumer market from a producer’s perspective, allowing for limited expansion and less specialization by companies. A secondary market exchanging the local currencies and the US dollar may also be created, theoretically adding to complications for large national corporations to enter the local markets. This paper investigates the question, what would happen if a similar currency were to be introduced into San Joaquin County, which is a region hit hard by the Great Recession and the protracted recovery. Through this analysis, it critically examines whether “going local” with the implementation of a local currency could be a useful policy to stimulate local economic growth in a world of global markets and financial contagion.
Location
DeRosa University Center, Ballroom
Start Date
21-4-2011 6:00 PM
End Date
21-4-2011 8:00 PM
Alternative Currencies, Bane or Boon?
DeRosa University Center, Ballroom
From at least the 16th century to the space age, to the computer age, the world has been in an ever increasing trend towards to increasing globalization. This globalized world we live in is now extensively interconnected through trade, commerce, and communications, with multi-national operations characterized as increasingly interconnected and knowledge intensive economies. However, there exists a seemingly anomalous counter trend: localization. Localization comes in many forms ranging from “locavore” restaurants, to buy local movement and local currencies. This paper analyzes the potential economic costs and benefits of one of these features of localization: local currencies. These currencies help to encourage spending at specific, local locations within the city or region of its origin. A latest example of this phenomenon may be found in the city of Davis, California, and it’s “Davis Dollar’ instituted by Davis Dollars, a startup non-government organization. There are several pros and cons to be found in relation to having a local currency. This currency could, theoretically, allow governments such as Davis to gain macroeconomic decision policy independence, away from the United States Federal Bank. As a result of this independence, governments could influence consumer spending behavior, therefore affecting its trade deficits or surplus. On the flipside, instituting local currencies could bring about certain negative aspects. When spending is kept within the local economy, it reduces trade with neighboring cities and counties, and thus diminishes the benefits of trade for the region. As a result, these regions could have a smaller consumer market from a producer’s perspective, allowing for limited expansion and less specialization by companies. A secondary market exchanging the local currencies and the US dollar may also be created, theoretically adding to complications for large national corporations to enter the local markets. This paper investigates the question, what would happen if a similar currency were to be introduced into San Joaquin County, which is a region hit hard by the Great Recession and the protracted recovery. Through this analysis, it critically examines whether “going local” with the implementation of a local currency could be a useful policy to stimulate local economic growth in a world of global markets and financial contagion.