Transformative finance Online publication date: Mon, 13-May-2024
by Christian Fahrbach
International Journal of Pluralism and Economics Education (IJPEE), Vol. 14, No. 3/4, 2023
Abstract: Transformative finance is a new topic in financial economics and provides a new methodology to stabilise financial markets in an economic crisis. The objective is to balance financial markets in an ongoing bear market. In this case, the central bank and the state are required to implement either negative nominal interest rates or negative nominal interest rates after taxes through appropriate monetary and fiscal policies. Accordingly, there are two different economic policies in which the central bank and the state play very different roles and which still lead to the same result. Both have the same effect on investor expectations: investors are guided by negative interest rates (after taxes), adjusting their return expectations downwards, making cheap equity available and thus easing financing conditions for companies. Both strategies are theoretically equivalent: stabilising the financial markets at a lower level of return on assets, thus promoting a lasting economic recovery.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Pluralism and Economics Education (IJPEE):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com
Our Blog 
Follow us on Twitter 
Visit us on Facebook