Sustainability, Technology, and Monetary Policy in a Globalized World — Principled Discord pt.5



The sustainability of our current standard of living has been questioned over the last few years. Public and private sectors are increasingly taking sustainable development into account. According to the working paper, “Financial Innovations & Sustainable Development” provided by Long Finance in 2018, “over the past few years, the disruptive effects of technology have meant that the financial services sector has embraced innovation in technology, services, platforms and, to some degree, systems”. As a result, the innovations in finance are expected to diminish the risks and exhilarate the sustainable outcomes.

The use oftechnology and modern solutions to solve some of the global economic problems are at the center of the conversation in this week’s episode of Principled Discord hosted byThierry Arys Ruiz interviewing Ekkehard Ernst,AI specialist at International Labor Organization (ILO) and President/Founder of Geneva Macro Labs & Future of Work.


Mr. Ernst believes that “policymakers themselves can no longer be the only actors in terms of addressing sustainability issues”. Moreover, Mr. Ernst states “Central Bank money shouldn’t be politicized. As a Central Bank, you have one objective, that is, monetary stability and that is already enough. There are Central Banks with several objectives, but you can’t really get the job done well in all of them and you end up diluting the initial mandate of price stability.”

Concerning the topic of what is largely regarded as unsustainable pension deficits, Thierry believes that the three main drivers to solve the problem involve a technical default by:


1. Monetizing the debt/ inflation: Mr. Arys believes that governments will have the tendency to incentivize inflation in order to reduce the debt burden. The debt would be paid in full (Nominal) but with currency worth much less than when the debt was issued, this way monetizing the debt via inflation.

2. Pushing the retirement age: This would act as a bond for which the maturity has been pushed forward. In the case of public pension funds, the rationale for governments would be to assemble a group of actuaries to determine by how much the retirement age should be pushed forward in order to obta