A Monetary System Without Obstacles to Exponential Economic Growth

A monetary model is proposed that removes the Triffin dilemma---the conflict between liquidity and preservation of value in a single instrument---and the monetary growth ceiling it generates. For a fixed growth rate, the model guarantees sufficiency of working capital, absence of its excess, and asymptotic constancy of the value of PERM coins. This is achieved by a two-coin architecture: TEMP with demurrage of nominal value for circulation, PERM with fixed nominal value for savings. It is shown that the monetary mechanism is capable of raising the natural reference growth rate of the economy determined by economic constraints. Moreover, in autarky, for any pre-specified rate one can choose an architecture in which it is realized as a stable balanced growth rate. In addition to rigorous results, the work advances a hypothesis about the formation of grassroots planning (through prepayment) and acceleration of technological progress (through forced investment of decaying TEMP); this hypothesis is explicitly separated from the proven statements. Some theorems rely on symbolic computations.