Cultural Consequences of Monetary Interventions

2016 ◽  
Vol 22 (1) ◽  
Author(s):  
Jörg Guido Hülsmann
Keyword(s):  
Twentieth Century ◽  
Money Supply ◽  
Monetary Theory ◽  
Credit Expansion ◽  
Demand For Money ◽  
Cultural Implications

AbstractHayek and Keynes are usually perceived as antipodes in one of the grand macroeconomic debates of the twentieth century. But they also agreed on some basic issues of monetary theory, most notably on the harmful character of money hoarding and the desirability of a flexible money supply to offset or neutralise changes in the demand for money. In our paper we highlight some of the cultural implications of a permanent expansion of the money supply. We will focus on the specific case of credit expansion (

Oil, Rates and Inflation

2005 ◽  
pp. 4-20
Author(s):  
E. Yasin
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Raw Materials ◽  
Gdp Growth ◽  
Business Activity ◽  
Demand For Money ◽  
Percentage Points

Currency inflow in Russia from raw materials exports allows taking into account high business activity to assimilate growing money supply transforming it into economic growth. Fall in business activity as a result of pressure on business led to saturation of demand for money. This considerably increases the danger of inflation growth and requires sterilization of excess money supply including the usage of the Stabilization Fund. According to the author's estimates, corresponding losses in GDP growth will equal 1-2 percentage points per year.

scholarly journals A WAR WITHOUT INFLATION: THE CASE OF ARGENTINA 1865–1870

2021 ◽  
pp. 1-9
Author(s):  
Carlos Newland
Keyword(s):  
Economic Growth ◽  
Money Supply ◽  
Currency Substitution ◽  
The Other ◽  
Demand For Money ◽  
Other Hand ◽  
Rapid Economic Growth

ABSTRACT Although paper note issuance increased dramatically in Argentina during the Triple Alliance War, inflation was not significant. This occurred because only a fraction of the increase in paper bills led to an expansion of the money supply, the rest being currency substitution. On the other hand, an increase in the demand for money for transactions was generated by rapid economic growth.

POLICY UNCERTAINTY AND THE DEMAND FOR MONEY IN SINGAPORE: AN ASYMMETRIC ANALYSIS

2021 ◽  
pp. 1-16
Author(s):  
MOHSEN BAHMANI-OSKOOEE ◽  
MUHAMMAD AFTAB ◽  
SAHAR BAHMANI
Keyword(s):  
Money Supply ◽  
Policy Uncertainty ◽  
Demand For Money ◽  
The Public ◽  
Uncertainty Measures ◽  
Long Run ◽  
Almost All ◽  
Measure Of Uncertainty

In search of a stable demand for money, almost all previous studies include two uncertainty measures captured by the volatility of the money supply and output. While in some countries, this yielded a stable demand for money, in some others, it did not. The latter was the case for Singapore. In this paper, we use a relatively more new and comprehensive measure of uncertainty known as policy uncertainty that is a news-based measure, and revisit the demand for money in Singapore. Our approach not only yields a stable demand for money in Singapore, but also reveals that the long-run effects of policy uncertainty on the demand for money are asymmetric. While increased uncertainty induces the public in Singapore to hold more money, decreased uncertainty does not affect.

scholarly journals ADAM SMITH’S THEORY OF MONEY AND BANKING

2017 ◽  
Vol 39 (3) ◽  
pp. 323-347 ◽  
Author(s):  
Nicholas A. Curott
Keyword(s):  
Flow Theory ◽  
Monetary Theory ◽  
Demand For Money ◽  
Excess Supply ◽  
The Real ◽  
Economics Literature ◽  
Nominal Income ◽  
Income Stream

This paper addresses a long-running debate in the economics literature—the debate over Adam Smith’s theory of money and banking—and argues that recent reinterpretations of Smith’s monetary theory have erroneously diverted historians of monetary thought from the correct, but briefly articulated, initial interpretations of Henry Thornton (1802) and Jacob Viner (1937). Smith did not present either the real-bills theory or a price-specie-flow theory of banknote regulation, as is now generally presumed, but rather a reflux theory based upon the premise that the demand for money is fixed at a particular nominal quantity. Smith’s theory denies that an excess supply of money can ordinarily make it into the domestic nominal income stream or influence prices or employment.

scholarly journals Relationship between Money, Output and Price Level in India: A Granger Causality Approach

2018 ◽  
Vol 4 (02) ◽  
Author(s):  
M. Manikandan ◽  
N. Mani ◽  
P. Karthikeyan
Keyword(s):  
Granger Causality ◽  
Money Supply ◽  
Price Level ◽  
Annual Data ◽  
Demand For Money ◽  
Causality Test ◽  
Time Series Method ◽  
Direction Of Causation ◽  
The Relationship ◽  
Casual Relationship

The relationship between money supply, income and prices is still a contentious concern mostly between the Keynesians and Monetarists. The Keynesians emphasise that a change in income reflects changes in money through demand for money, which means that there exists a unidirectional causality from income to money without any criticism. The Monetarists claim that money is the most important cause leading to changes in income and prices. Therefore, the direction of causation runs from money to income and prices without any feedback. This article studies the association between these macroeconomic aggregates using time series method of pair wise Granger causality test on annual data of the Indian economy over the period 1950-51 to 2012-13. Lag length is favoured by using standard criteria through VAR estimation. The Monetarists view is strongly supported by the result of this study. It is understood from the paper that the monetary policy has a force on the Indian macroeconomic variables as there is a casual relationship between money supply to inflation and income. Nevertheless, these relationships of variables are sensitive to lag length selections.

scholarly journals Monetary Anticipations and the Demand for Money: An Application for the South Asian Region

1987 ◽  
Vol 26 (4) ◽  
pp. 529-539
Author(s):  
Ather Maqsood Ahmed ◽  
Mohammad Rafiq
Keyword(s):  
Money Supply ◽  
Money Demand ◽  
Durable Goods ◽  
Demand Function ◽  
Shock Absorber ◽  
Demand For Money ◽  
Money Demand Function ◽  
Transitory Income ◽  
Consumer Durable ◽  
Definition Of

While there are a number of issues in economics which are frequently scrutinized, the most important of them probably is the determination of a stable money demand function. Other issues in this regard relate to the choice between (i) broad vs. narrow definition of money; (ii) measured vs. permanent income; (iii) short-term vs. long-term interest rate; and (iv) inclusion of a variable for inflation or expected inflation. Quite recently, a new dimension has been added to the demand for money function. It is now argued that unanticipatory changes in the nominal money supply also affect the real demand for money. Darby (1972) has proposed that unanticipatory nominal money supply behaves as a shock-absorber in the money demand function. Initially, Laidler (1980) and then Carr and Darby (1981) formulated a shock-absorber model in which they have shown empirically that unanticipatory shocks in money supply positively affect the demand for money. Inclusion of this shock variable was justified by Darby (1972) on the ground that money balances serve as a buffer stock or shock-absorber which temporarily absorbs unexpected variations in income, especially the transitory income, until an adjustment is reached in adjusting the portfolio of securities and in consumer durable goods. The shock absorber model of Carr and Darby is based on the following two hypotheses:

scholarly journals Money Supply as the Target of the Central Bank

2014 ◽  
Vol 14 (1) ◽  
pp. 116-136
Author(s):  
Andrzej Jędruchniewicz
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Money Supply ◽  
Point Of View ◽  
Main Trend ◽  
Demand For Money ◽  
Intermediate Target ◽  
The Third ◽  
Production And Consumption ◽  
Shape Changes

Abstract The main purpose of the article is a critical analysis of the monetary policy strategy that is based on the adoption of money supply as an intermediate target. The analysis is conducted from the perspective of the theory of the Austrian school. The first part of the article presents an influence of the supply of money on changes of categories in economy according to mainstream theories of economics. The second part discusses the essence of the strategy of monetary policy using money supply as an intermediate target from the point of view of the main trend in economics. It is demonstrated that in order to use it, two elementary conditions must be met: the function of demand for money must be at least relatively stable and the central bank must practically shape changes in the money supply at the planned level. The third part is of key importance for the purpose of this article. It involves the criticism of Friedman’s principle, i.e. a constant increase in money supply as a monetary strategy. According to the Austrian theory, an increase in the quantity of money which is not financed by voluntary savings separates the time structure of production and consumption. Thus, after the period of prosperity there a collapse in production must take place. It is also pointed out that the crisis can be postponed only when the quantity of money increases at an ever faster rate.

scholarly journals THE MONEY SUPPLY AND POST KEYNESIAN MONETARY THEORY

1986 ◽  
Author(s):  
ΔΕΣΠΟΙΝΑ ΜΕΝΓΚΟΥΣΗ
Keyword(s):  
Money Supply ◽  
Monetary Theory

scholarly journals Liquidity Preference Theory or Loanable Funds Theory

2021 ◽  
Vol 9 (8) ◽  
pp. 87-91
Author(s):  
Bruno Jossa
Keyword(s):  
Interest Rates ◽  
Money Supply ◽  
Demand For Money ◽  
Preference Theory ◽  
Main Factors

In Keynes’s approach, interest rates are driven up by rises in demand for money and scaled down by rises in money supply. On the contrary, this paper argues that neither of these propositions will stand the test of scrutiny. Keynes traced demand for money to three main factors, the transaction, precautionary and speculative motives, but rises in demand associated with the transaction motive do not necessarily drive up the rate of interest.  The paper shows also that the liquidity preference theory and the loanable funds theory are different theories and that the former is faulty, while the latter is correct.

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