Central Banks and the Governance of Monetary Space

Authors: David Bieri*, Virginia Tech
Topics: Economic Geography, Geographic Thought
Keywords: financial geography, geography of money
Session Type: Paper
Day: 4/4/2019
Start / End Time: 3:05 PM / 4:45 PM
Room: 8222, Park Tower Suites, Marriott, Lobby Level
Presentation File: No File Uploaded

From regional redistribution through mortgage markets to the monetary policy effects on local house price dynamics, the Great Financial Crisis (GFC) has been a powerful reminder that money and credit—always and everywhere—matter for the evolution of the space-economy. In addition to the spatially uneven impact of money and credit, the GFC has also demonstrated that the role of central banks is second to none in forming the institutional pivot points on which the global financial system hinges. This paper examines the evolving role and function of central banks in the post-crisis geography of money. Paying particular attention to François Perroux’ analysis of economic spaces, I show that central banks from the institutional apex in the inherent hierarchy of global monetary space. As such, central banks critically define three fundamental relationships among constituent economic elements in the Perrouxian system, i.e. (i) economic space as defined by a plan; (ii) economic space as a field of forces; and (iii) economic space as a homogeneous aggregate. The remainder of the paper argues that, despite an enthusiastic re-engagement with the ‘economic geography of money and finance’ in the decade after the GFC, monetary space plays no more than a perfunctory role in the current literature. Indeed, neither geographers nor economists actively engage with the spatial macrofoundations of modern credit theories of money.

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