Dr. Steffen Murau| steffenmurau.com


My research revolves around the political economy of the modern credit money system. How it works, how it transforms, and how it can be governed. I approach it from the perspective of institutionalist International Political Economy and use the conceptual lens of the Money View, a contemporary credit theory of money.

Credit money is a spectrum of debt instruments that changes over time. I am particularly interested in instruments at the edge of the spectrum, “shadow money”. It is here where things get blurry and problems of defining money are part of the phenomenon itself.

I have developed the ‘monetary architecture’ framework which allows visualizing the monetary and financial system as a web of balance sheets that interlock via different credit instruments. A ‘monetary architecture’ typically comprises central banks, commercial banks, non-bank financial institutions, as well as a fiscal ecosystem made up of treasuries and off-balance-sheet fiscal agencies. It is possible to ‘map’ the institutional configurations of monetary architectures in different geographical areas and at different points in time.

In my work, I address four major themes: private credit money accommodation (how the balance between public and private money changes through financial crises), the international monetary system (how monetary affairs are organized beyond the classical nation state), the European Monetary Union (how monetary questions are addressed in the process of European integration), and financing large-scale transformations (how states can use modern monetary architectures to pay for wars, reconstruction, or the Green Transition).

Private Credit Money Accommodation

Private credit money accommodation is a theory on the long-run transformation of the modern credit money system. During financial upswings, new forms of private credit money emerge as “shadow money”. At the end of the boom, they implode in a systemic financial crisis. When the state steps in and guarantees them, they are “accommodated” into the public money supply. Public money today is accommodated private credit money of the past.

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International Monetary System

The international monetary system of the 21st century should be understood as Offshore US Dollar System. This arrangement has gradually evolved since the 1950s and replaced the state-planned Bretton Woods System when it collapsed in the 1970s. Today, international monetary affairs are primarily organized through private banks and shadow banks that use the US dollar as the unit of account and operate offshore, outside of the US monetary jurisdiction.

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European Monetary Union

The European Monetary Union is a unique experiment in monetary history. Its initial design only made central bank money truly European, but left commercial bank and shadow bank money predominantly national. After a decade of smooth sailing, it entered into crisis mode in 2009 and has never fully recovered. Through endogenous change and political interventions, it now has an architecture that nobody has planned. It is continuously transforming and difficult to govern.

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Financing Large-Scale Transformations

The Green Transition to net-zero carbon emissions is the greatest challenge of our age. We broadly know what technically needs to happen, but where should the money come from to pay for it? Financing large-scale transformations is a process that requires macro-financial governance, which involves manufacturing an initial balance sheet expansion, organizing long-term funding, stabilizing against financial crises, and facilitating an orderly final contraction.

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