THROUGH A MONETARY INTERVENTION TOWARDS ECONOMIC GROWTH

Abstract

The paper reviews the possibilities of overcoming the current economic and financial crisis by implementing an efficient monetary policy. The theoretical and practical aspects of monetary functions, and the role of banks as intermediaries between those who supply and demand monies, are substantiated in the first part of the study. The second part of the paper is dedicated to analyzing the relationship between the products of labor and the movement of money (cash flow). An inescapable conclusion is made that problems concerning a surplus or deficit of money can be solved successfully between the economic agents involved in the creation of the products of labor. The third part of the research highlights the rational use of money. It is emphasized that the monetary phenomenon is effective when the analysis of its relationship to its roots - production – is taken into account. Of important significance here is a strong and efficient banking system alongside an adequate credit and interest policy. The fourth part of the article substantiates the necessary monetary measures and policies for overcoming the current crisis: the stability of currency; the necessity for investment; the stability of the banking system; an adequate deposit and credit policy; an increase in state expenditure; tax cuts and an amnesty for “hidden” income.