TTTF SHIFT and the Productivity Allocation as a Macroeconomic Stability Mechanism in an Automated Economy
1. Macroeconomic context and the structural problem
Contemporary economies are experiencing a persistent divergence between productivity dynamics and the effective distribution of purchasing power. Total factor productivity has increased significantly, driven primarily by automation, digitalization, and artificial intelligence, while the disposable income and economic security of large segments of the population have stagnated or deteriorated.
From a monetary policy perspective, this structural divergence generates recurrent challenges:
- weakening of the monetary transmission mechanism;
- increasing reliance on unconventional monetary policies;
- heightened volatility of aggregate demand;
- accumulation of structural imbalances between capital and labor.
These phenomena cannot be adequately addressed through monetary instruments alone, as their origin is structural and fiscal, rather than cyclical.
2. Structural limits of the current fiscal framework vis-à-vis monetary policy
Traditional fiscal systems are centered on taxation of labor income, accounting profits, and final consumption. In an economy increasingly dominated by automation and AI, these tax bases:
- erode relative to total value creation;
- become pro-cyclical;
- introduce behavioral distortions;
- amplify social and political tensions with indirect effects on financial stability.
For central banks, this results in mounting pressure to compensate, via monetary policy, for deficiencies that stem from fiscal architecture and the initial distribution of economic participation.
3. TTF SHIFT: realigning fiscal bases with real value flows
TTF SHIFT proposes a uniform, low-rate micro-tax on all monetary transactions, replacing fragmented taxation of labor, consumption, and profits. From a macroeconomic standpoint, this framework presents several stability-relevant features:
- an exceptionally broad and automation-resilient tax base;
- a low marginal rate, minimizing microeconomic distortions;
- fully automated collection with negligible administrative cost;
- inherently counter-cyclical behavior, directly linked to economic activity volume.
However, historical and international experience demonstrates that transaction-based taxation, when implemented in isolation, may impair monetary circulation unless accompanied by a legitimacy-enhancing mechanism. This is precisely the role of the Productivity Allocation.
4. Productivity Allocation: a structural demand-stabilization mechanism
The Productivity Allocation is delivered via a dedicated electronic card with a monthly ceiling of up to €1,000, automatically reloaded to the maximum level at the beginning of each calendar month, granted universally and individually.
From a monetary policy perspective, this mechanism functions as:
- an automatic stabilizer of aggregate demand;
- an anchor of consumption predictability;
- a structural reduction in income-related uncertainty.
Crucially, the allocation:
- does not constitute a capital transfer;
- is not savings-eligible;
- does not fuel asset accumulation or speculative demand.
Its use is strictly limited to payments to authorized domestic merchants, excluding interpersonal transfers, saving, investment, cash withdrawal, or foreign payments. Consequently, the mechanism affects money velocity, not net money supply.
5. Systemic interaction between TTF SHIFT and the Productivity Allocation
From a systemic perspective, the two components are inseparable:
- the Productivity Allocation sustains monetary circulation;
- monetary circulation generates fiscal revenue via TTF SHIFT;
- predictable fiscal revenues reduce pressure on monetary policy.
This creates a closed macroeconomic loop in which:
- aggregate demand is structurally stabilized;
- public revenues become more predictable;
- reliance on extraordinary monetary interventions is reduced.
For the central bank, this framework facilitates a reconnection between monetary policy and the real economy without overstretching traditional instruments.
6. Implications for price stability and financial stability
Contrary to common concerns, the model is not inflationary in the classical sense, as it:
- does not introduce discretionary monetary expansion;
- does not encourage liquidity hoarding;
- does not stimulate asset price bubbles.
On the contrary, by reducing demand volatility and improving predictability of monetary flows, the TTF SHIFT + Productivity Allocation framework simplifies monetary calibration and improves policy transmission.
7. Conclusion
TTF SHIFT, together with the €1,000 Productivity Allocation Card, should not be assessed as a social or fiscal policy in isolation, but as macroeconomic stability infrastructure for an automated economy.
For central banks, this architecture offers:
- reduced dependence on unconventional monetary tools;
- stabilized demand without monetary expansion;
- enhanced systemic legitimacy;
- improved alignment between monetary flows and productive reality.
In this sense, TTF SHIFT and the Productivity Allocation do not compete with monetary policy. They structurally complement it, enabling monetary authorities to refocus on their core mandate: safeguarding price stability and confidence in the national currency within a profoundly transformed economic landscape.
