Stimulate currency circulation in the currency community by creating a customized community
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Stimulate currency circulation in the currency community by creating a customized community Maen Alaraj1 · Makoto Nishibe1
© Japan Association for Evolutionary Economics 2020
Abstract Community currencies (CCs) are considered one of the tools used to energize and stimulate the economy and foster sustainable development. This sustainability was formed by iterating non-commercial (e.g., volunteer activities) and subsequent commercial transactions through using the earned CCs from non-commercial transactions in commercial transactions. While many studies have tried to assess the actual impact of these currencies, stagnation in CCs still has not been solved effectively. This paper aims to reduce stagnation by proposing a concept of “customized community” to accelerate the circulation of CCs by creating a market that fits the needs of members within the community. This market is created by giving a “preference” to people who would like to join the community by giving a bonus premium amount to add to the initial purchase of CC with money. The selection of the “preferred” people is based on personal factors (e.g. gender, product category etc.) of members who were frequently and actively involved in the CC transactions. Our main findings suggest that this concept can reduce the stagnation in CCs significantly from 15% to 3%. This customization has been examined by creating a random network model of 100 people and using computer simulation to analyze transactions. Keywords Computational economics · Network analysis · Customized community · Currency stagnation · Entropy
1 Introduction In general, currency stagnation occurs when the circulation of currency in specific areas become less than other areas due to many factors such as lower population concentration in rural areas. Thus, CCs have been created to revitalize the * Maen Alaraj [email protected] Makoto Nishibe [email protected]‑u.ac.jp 1
Good Money Lab, Senshu University, Kanagawa, Japan
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Evolutionary and Institutional Economics Review
local economy of those areas. In this regard, CCs can be defined as a type of complementary currency and used by groups with a common bond, like members of a locality, or association, for accomplishing the aim of revitalizing local economies. Many types of CCs have been proposed, but it seems that those CCs have also have some drawbacks in terms of stagnation. For instance, “Eco-money” which was proposed by Kato (2001) as a special type of CC was used in volunteer activities among citizens to activate mutual aids and stimulate social welfare services. Ecomoney was designed to be used in volunteer activities and social welfare services. Eco-money was accumulated in the hands of participants (especially younger generations) who significantly contributed to the volunteer activities. However, they could not find desired services and products in the market to spend their “Eco-money” and hence stagnation occurred. The double triangle system (DTS) was proposed by Nishibe (2004) to cope with the stagnation
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