Formal and Functional Analysis of the Role of Money in the Reproduction Process: New Aspects of the Modern Theory of Money

Abstract

The authors investigate the role of money in the reproduction process from the perspective of a functional approach, including the influence of external factors. The aim of the study is to develop the modern theory of money at the formal and functional level based on the analysis of the role of money in the reproduction process in the concept of coordination of monetary, macroprudential and financial policies of Russia for the purpose of economic growth. The novelty of the research is due to the development of the modern theory of money on the basis of clarifying the role of money in the reproduction process influenced by decisions made to coordinate the monetary, macroprudential and financial policy. The authors apply methods of system-structural, formal-functional, comparative economic analysis, econometric modeling using correlation-regression analysis, economic and mathematical methods. The authors developed a methodological framework for analysis, identified and structured the possibilities and risks of applying macroprudential policy measures for monetary circulation, illustrated the threats to the economy and its main macroeconomic entities due to the spread of coronavirus disease, summarized measures in the field of monetary and financial regulation to overcome threats and strengthen the role of money in the reproduction process. The authors conclude that it is necessary to form a trusted digital space, that forms the possibility of leveling the negative impact of external factors on the reproduction process and restoring the reproduction potential of money for economic growth, considering the coordination (conjugation) of monetary, macroprudential and financial policies. The implementation of the authors' proposals to enhance the role of money in the reproduction process will allow to "revive" the economy by increasing the demand for money and ensuring an adequate money supply. It will also enhance the ability of monetary, macroprudential, and financial policy instruments to influence reproduction processes and economic growth.

Banking Sector Profitability: Does Household Income Matter?

“…Income of the population forms the demand for all the variety of goods and services of other sectors of the economy, including the banking sector. Stable development of the banking sector contributes to economic growth [2,3] and is accompanied by the creation of jobs with decent conditions, wages [4], the formation of sources for the economy's transition to renewable energy [5], as well as the reorientation of the system of education, morality with new civilization values, greening the consciousness and worldview of population [6].…”