Money is money: The economic impact of BerkShares

Community currencies are a popular way localities around the world pursue a sustainable economy. However, no studies look at the economic impact of community currencies using modern causal inference methods. We use the synthetic control method to examine the short and long-term effects of the popular community currency Berk-Shares on the number of businesses, unemployment rate, and per capita income in the county in which it cir-culates. The results suggest that BerkShares has not had a discernible impact either directly on businesses or indirectly on local economic conditions. Additionally, BerkShares has not impacted business dynamics in a measurable way. Results from the synthetic control method suggest that establishment births, deaths, expan-sions, and contractions figures following BerkShares are no different than what they would have been without the currency. Given its lack of discernible impact, the results serve as a caution for localities considering com-munity currencies as an economic development strategy.