The Limits of Mainstream Monetary Policy and a Proposal for Public Banks

This chapter analyses the effectiveness of the interest rate monetary policies implemented by the ECB over the past ten years. Following a critical analysis and discussion of the theoretical background of negative interest rate policy (NIRP) and interest rate increase to combat inflation, post-Keynesian ideas and policies are proposed and presented. A possible way out of the economic stagnation could be the implementation of public banks, a crucial node of monetary, as well as industrial and fiscal policy. This instrument is already present in the economic policy of many countries, and its implementation can be the trump card to face the challenges of this decade.