Money Supply Research Papers - Academia.edu (original) (raw)

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- by
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- Economics, Economic Theory, Applied Economics, Proceedings

The foreign exchange rate fluctuations do create an
impact on stock returns, which has been
investigated for non-financial listed Pakistani firms. The real
effective exchange rate has been used as the true measure of foreign
exchange exposure. The modelled econometric equation includes;
firm size, firm liquidity, money supply and inflation as predictors
of stock returns. Twenty-five non-financial listed firms have been
evaluated for the study period 2004 to 2013, which signifies the
military regime era proceeded by peoples party rule in Pakistan.
Financial data analysis, including; ADF unit root and Johansen
Co-integration tests, have been applied to evaluate financial data,
which further led to correlation, descriptive stats and panel data
regression analysis. The results have suggested a very weak
relationship between stock returns and foreign exchange exposure.
Therefore, sample non-financial listed firms have not been foreign
exchange exposed; however, firm size, liquidity, money supply and
inflation rates have definitely created an impact on stock returns.

- by Prof. Dr. Syed Muhammad Ali Tirmizi
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- Liquidity, Firm Size, Money Supply, Stock Returns

Problem statement: Forecasting is a function in management to assist decision making. It is also described as the process of estimation in unknown future situations. In a more general term it is commonly known as prediction which refers to estimation of time series or longitudinal type data. Gold is a precious yellow commodity once used as money. It was made illegal in USA 41 years ago, but is now once again accepted as a potential currency. The demand for this commodity is on the rise. Approach: Objective of this study was to develop a forecasting model for predicting gold prices based on economic factors such as inflation, currency price movements and others. Following the melt-down of US dollars, investors are putting their money into gold because gold plays an important role as a stabilizing influence for investment portfolios. Due to the increase in demand for gold in Malaysian and other parts of the world, it is necessary to develop a model that reflects the structure and pattern of gold market and forecast movement of gold price. The most appropriate approach to the understanding of gold prices is the Multiple Linear Regression (MLR) model. MLR is a study on the relationship between a single dependent variable and one or more independent variables, as this case with gold price as the single dependent variable. The fitted model of MLR will be used to predict the future gold prices. A naive model known as "forecast-1" was considered to be a benchmark model in order to evaluate the performance of the model. Results: Many factors determine the price of gold and based on "a hunch of experts", several economic factors had been identified to have influence on the gold prices. Variables such as Commodity Research Bureau future index (CRB); USD/Euro Foreign Exchange Rate (EUROUSD); Inflation rate (INF); Money Supply (M1); New York Stock Exchange (NYSE); Standard and Poor 500 (SPX); Treasury Bill (T-BILL) and US Dollar index (USDX) were considered to have influence on the prices. Parameter estimations for the MLR were carried out using Statistical Packages for Social Science package (SPSS) with Mean Square Error (MSE) as the fitness function to determine the forecast accuracy. Conclusion: Two models were considered. The first model considered all possible independent variables. The model appeared to be useful for predicting the price of gold with 85.2% of sample variations in monthly gold prices explained by the model. The second model considered the following four independent variables the (CRB lagged one), (EUROUSD lagged one), (INF lagged two) and (M1 lagged two) to be significant. In terms of prediction, the second model achieved high level of predictive accuracy. The amount of variance explained was about 70% and the regression coefficients also provide a means of assessing the relative importance of individual variables in the overall prediction of gold price.

- by zuhaimy ismail
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- Decision Making, Time Series, Forecasting, Multidisciplinary

This paper reports the results of simulation experiments which were conducted by using a CGE model of Argentina. The results suggest that: the economy could not have been stabilized by using the preannouneed devaluation rate during 1978-81; economic performance could have improved in 1985-89 under a modified Austral plan but, with the altered structure, there would still be a severe currency appreciation; and the Convertibility Law based programme is very successful in arresting inflation and eliminating a budget deficit, though it is not free from side effects such as money supply shortages and high interest rates.

- by Erwin Klein
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- Econometrics, Applied Economics, Economic performance, Budget Deficit

A specific risk of this period is liquidity risk arised from inexistence of adecquted management. A new risk arises from financial measures against the effects of economic worldwide crisis. These measures are dedicated to mitigate the crisis risks but, they may become a real challange for companies and individuals caused by new competence needed. As a conclusion, the topic of

- by Elena Dobre
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- Public Administration, Venture Capital, Monetary Policy, Financial Crisis

In this paper we investigate the performance of the APT for securities traded on the London Stock Exchange. We analyze performance in terms of the presence of common pervasive factors across two different samples allowing for the fact that returns exhibit an approximate factor structure. Unlike most previous studies, we find that for two subsamples of assets it is possible to arrive at a unique return generating process in the sense that three factors relating to the money supply, inflation and excess returns on the stock market are priced and carry the same prices of risk in both samples. q

- by Antonios Antoniou
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- Econometrics, Empirical Finance, Stock Market, Arbitrage Pricing Theory

We turn our attention to the role of money for determining nominal magnitudes. Using US data, we find that the aggregate “nominal output plus and stock market capitalisation” is closely related to the money stock, lending support to one of Milton Friedman’s key monetarist propositions. This finding should be particularly important for ECB monetary policy: an inflation-free euro plays a

- by Thorsten Polleit
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- Monetary Economics, Heterodox Economics, Stock Market, Structuralism

This study examines the impact of mortgage credit on economic growth in Nigeria. The data used were collected from the Central Bank of Nigeria statistical bulletin for a period of 24years from 1992-2015. Mortgage credit was proxy by mortgage loans advance by a Primary mortgage institutions (PMIs) as well as other macroeconomic variables which include broad money supply (M2) and Inflation rate (infr) while economic growth was proxy by Gross Domestic Product (GDP). Unit root test was carried out using Augmented Dickey Fuller and Phillips Perron test and the findings showed that all variables were stationary at first difference. The error correction mechanism result showed that there exist a long run relationship among the variables therefore, we recommend that mortgage credit should be made available to the public and the CBN should ensure that inflation rate are kept as low as possible, because high inflation rate impedes the impact of credit on economic growth.

- by kolawole Ebire
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- Economic Growth, Interest Rates, ECM, Mortgages

Monetary services in an economy is delivered by various financial assets like demand deposits, saving deposits, time deposits and others. Hence it is very important to define money supply of any economy and evaluate the trends for the same .RBI has defined money supply from time to time. Hence various prepositions of money supply are available. This paper will elaborate the available prepositions and will evaluate the trends for the same from 1964-65 to 2016-17. This paper will also study the growth rate of reserve money, broad money and narrow money for the same period of time. Correlation between various prepositions is also evaluated.

- by AARF Publications Journals
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- Money Supply
- by George Kararach
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- Demand for Money, Fiscal policy, Monetary Policy, Granger causality

This paper investigates on the impacts of money supply, inflation rate and interest rate on economic growth of Bangladesh by using the time series data on past 36 years from the period of 1981 to 2016. In order to do so, Autoregressive Distributive Lag (ARDL) model along with the Error Correction Model (ECM) model are used. The empirical analysis shows that broad money supply, inflation rate, interest rate possesses a long-run association with economic growth. The broad money supply and economic growth exhibits a significant and positive relationship whereas a positive but insignificant relation is found between inflation rate and economic growth in the long run. In addition, interest rate negatively related with the economic growth in the long run because of the deterioration of investment in the economy. This study also concludes that no significant short-run association is found between the assigned variables. However, in case of short run, broad money supply and inflation rate have negative effects on economic growth with the exception of the interest rate. The short-run and long-run models of economic growth are free from serial correlation and are stable over the sample periods of Bangladesh found from the test of Cumulative sum of recursive residuals (CUSUM). Index Terms-Economic growth, money supply, inflation rate (CPI), interest rate, Autoregressive Distributive Lag (ARDL), Error Correction Model (ECM), Stability.

- by Nahida Sultana
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- Economic Growth, Inflation, Interest Rate, Money Supply

Povezujući štednju i investicije finansijski sistem doprinosi ubrzanom privrednom rastu a time i rastu životnog standarda, odnosno blagostanju svih ljudi. To je ujedno i osnovni razlog zašto je ovaj udžbenik prvenstveno posvećen... more

- by Katarina Panić
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- Financial management, Financial Markets, Money, Monetary Policy
- by Lyka Ledina
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- Monetary Economics, Philippines, Money and Banking, Foreign Direct Investment ( FDI )

This paper studies the dynamic causal relationships between inflation rate, foreign exchange rate, money supply, and gross domestic product (GDP) in Egypt during the period 2005: Q1 to 2018: Q2. Using the bounds testing approach to cointegration and error correction model, developed within an ARDL model, we investigate whether a long-run equilibrium relationship exists between the inflation rate and three determinants (foreign exchange rate, money supply, and GDP). The results indicate that the exchange rate and the growth in money supply have significant effects on the inflation rate in Egypt, while the real GDP has no significance effect on the inflation rate

- by Mohamed R . Abonazel
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- Economic Growth, Exchange rate, ARDL Cointegration, Money Supply

Тук Професор Паскал Сален прилага австрийската икономическа теория за да представи и изтълкува различните стопански явления довели до тежката криза от 2007-2009. За него именно етатизмът подхрани кризата. След един ХХ-ти век белязан с войни и различни форми на тоталитаризъм, за щастие завършил със срутването на комунистическите режими, бе позволено да мислим, че светът ще се приобщи към капитализма изразен както в действия, така и в начин на мислене и вяра. Това не се случи. Държавният интервенционизъм се засили в повечето страни и капитализмът бе остро и тежко критикуван и атакуван. Именно в този контекст се разрази икономическата криза. И преобладаващото мнение с лекота обясни тази криза като една красноречива проява на нестабилната същност на капитализма както и на неговата неморалност.
Последствие на липсата на етика от страна на банкерите ли е кризата? Или ефект на едно алчно безразумие подстрекано да рискува прекомерно за да се сдобие с още повече бонуси? За Паскал Сален това е един прекалено семпъл анализ. А може би е продукт на едно прекалено дерегулиране? Грешка, твърди той. По-скоро на прекалено много регулации, погрешни икономически и парични политики ... и на недостъг на капитализъм. В последствие държавата би ли била отново решението, както твърдят подържниците на интервенционизма и регулациите отново на мода? Съвсем не е сигурно подчертава Сален. Това „възвръщане на държавата” застрашава съвсем да ни разори ... Ето как кризата и обичайните лицемерни интерпретации са видяни през погледа на един свободен ум.

- by Momtchil Karpouzanov
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- Economic Sociology, Economics, Political Economy, Austrian Economics

Opening ceremony Romanian local public finance decentralization Tatiana Moşteanu, Carmen Maria Lăcătuş / 13 The domestic economic policy -from macroeconomic influences to strengthening the competitive equity Ioan Cuzman, Daniel Manaţe, Pavel Fărcaş / 20 The performance of romanian open-end funds and the crisis context Carmen Corduneanu, Daniela Ţurcaş / 26 Financial crime and the securization of banking circuits in order to prevent and fight against money laundering Ion Stancu, Daniel Rece, Filip Iorgulescu / 34

- by Elena Dobre
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- Monetary Policy, Financial Crisis, Macroeconomic Variables, Current Account Deficit
- by Steve Keen
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- Global Financial Crisis, Economic Policy Analysis, Money Supply, Dynamic Model of WSN

This paper established that interest rate, inflation, and money supply had negative effects on Nigeria's economic growth in the short run, while in the long run; exchange rate had significant positive effects. A combination of Breusch-Godfrey Serial Correlation, White Heteroskedasticity, Ramsey Reset, Dickey-Fuller unit root was used for preliminary analysis. Ordinary Least Square (OLS) was used for short run estimate, while a combination of Johansen Co-Integration, Granger Causality Tests and impulse response analysis were used for long run estimation. Our model shows that the four monetary policy variables have 88% joint probability of affecting level economic growth as well as explained 84% of economic growth Nigeria experience for the period 1980-2012. The paper concludes that for sustainable economic growth to be achieved, monetary authority must devise short term strategies to manage periodic volatility in interest rate, money supply and inflation, while medium and long term strategies must be adopted to stabilize the value of the domestic currency.

- by EBIRINGA THADDEUS
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- Economics, Macroeconomics, Economic Growth, Monetary Policy

The relationship between inflation and money growth has been tested for Brazil over the period 1991- 2012. Thereafter using the data on money growth and inflation for USA, for the same period, we test if the relationship is as strong for the developed economy. Our estimates suggest that a smoothened measure of money and quasi money growth, corrected for real-time estimates of trend velocity and potential output growth, has important leading indicator properties for switches in inflation. Thus money growth provides an important early warning indicator for risks to price stability. However the relationship does not prove to be so strong for developed economies (USA) as it is for developing countries (Brazil).

- by Arkapratim Roy
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- Macroeconomics, International Political Economy, Brazil, BRICS

Purpose -The purpose of this paper is to investigate the performance of the arbitrage pricing theory (APT) in the Istanbul Stock Exchange (ISE) on a monthly basis, for the period January 2001 to September 2005. Design/methodology/approach -This study examines six pre-specified macroeconomic variables which are: the term structure of interest rate, unanticipated inflation, risk premium, exchange rate and money supply. All these are the same as those used by Chen, Roll and Roll for the US market. In this study, the authors develop one more variable namely unemployment rate, which has a relation with the stock return. Findings -Using the OLS technique, the authors observed that there are some differences among the market portfolios. Before starting to comment on the result of OLS, the serial correlation problem was discussed by using Durbin-Watson statistics. In this study, the critical values were ranged from between 1.33 and 1.81 (T ¼ 57, K ¼ 6). Our test results confirmed that in ten out of the 13 there were no serial correlations. Our results show that there are big differences among market portfolios against macroeconomic variables through the variation of R 2 . In the remaining portfolios; there was no evidence to suggest.

- by HousamAl Rjoub
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- Macroeconomics, Applied Economics, Stock Market, Arbitrage Pricing Theory

This article is an attempt to examine the short and long-run relationship between the trade balance, income, money supply, and real exchange rate in the case of Pakistan's economy. Income and money variables are included in the model in order to examine the monetary and absorption approaches to the balance of payments, while the real exchange rate is used to evaluate the conventional approach of elasticities (Marshall Lerner condition). The bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework is applied to annual data for the period 1970 to 2005 in order to investigate whether a long-run equilibrium relationship exists between the trade balance and its determinants. Additionally, variance decompositions (VDCs) and impulse response functions (IRFs) are used to draw further inferences. The result of the bounds test indicates that there is a stable long-run relationship between the trade balance and income, money supply, and exchange rate variables. The estimated results show that exchange rate depreciation is positively related to the trade balance in the long and short run, consistent with the Marshall Lerner condition. The results provide strong evidence that money supply and income play a strong role in determining the behavior of the trade balance. The exchange rate regime can help improve the trade balance but will have a weaker influence than growth and monetary policy.

- by wakeel khan
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- Monetary Policy, Impulse response, Error Correction, Trade Balance

The Bank of England, which has been independent since 1997, possesses the role of policing the UK’s money supply; usually done through their monetary policy. Money supply is the amount of money in circulation at any time, though the quantity isn’t always distinct; this could be down to the fact that money always fluctuates because it is subject to the instabilities of demand. Money supply can be broken down into two types of money; narrow and broad (Ken Heather, 2004). Narrow money (M₀/M₁) can be described as the notes and coins in transmission which includes the deposits received at commercial banks that are with the Bank of England. Whereas Broad money (M₃/M₄) is an amalgamation of narrow money and deposits with banks, which also includes foreign currency/deposits; this is because broad money is the total amount of money flowing in the economy. Money supply tends to be regulated as an attempt at maintaining constant price stability in the economy (Friedric S. Mishkin et al 2012). There are a number of ways in which the Bank of England could go about increasing the money supply in the economy which include open-market operations, refinancing rate and adjusting requirements.

- by Mardiyyah Tijani
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- Economics, Macroeconomics, Money Supply

Extract:
This work is describing the creation of monetary functions in a POW camp during the Second World War. It displays how ‘cigarette’ has become the means of exchange taking the role of money in a closed environment. One can notice that in such circles, the means respected by all participants can play the role of the means of exchange and storing the value functions. The study is prepared from an article using a diary of a POW.
Özet:
Bu çalişmada İkinci Dünya Savaşı sırasında bir kampta paranın görevlerinin nasıl ortaya çıktığı anlatılmaktadır. Böylesi bir kapalı ortamda, sigaranın nasıl bir ‘mübadele aracı’ haline geldiği açıklanmaktadır. Okurlar, bütün katılımcıların kabul ettiği ödeme vasıtalarının, değişim ve değer saklama aracı haline geldiğini izlemektedirler. Çalışma, bir kamptaki savaş esirinin notlarını kullanarak hazırlanan bir makaleden esinlenmiştir.

- by Haluk F Gursel
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- Economics, Money, Trade, Economic activity

This paper examines the effect of inflation and money supply on output growth in Nepal over the period of 45 years from mid-July 1975 to 2019. Autoregressive distributed lag (ARDL) model is applied in this study in order to investigate the existence of the long-run and short-run relationships between the variables. Furthermore, this study uses natural logarithm of real GDP as a proxy for output growth, natural logarithm of broad money (M2) as a proxy for money supply and percentage change in Consumer Price Index (CPI) as a proxy for inflation rate. The results of ARDL bounds test reveal that inflation and money supply are cointegrated with economic growth over the study period. In addition, money supply in Nepal leads to output growth in the long-run as well as short-run, however, inflation negatively effects output growth both in the long-run and short-run. Based on these results, it can be concluded that money supply in Nepal can stimulate output growth, whereas inflation can be detrimental to economic growth. Thus, government should plan monetary policy to maintain a tolerable and lower rate of inflation, so as to boost the economy of the country.

- by Sushil Rana
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- Economics, Macroeconomics, Economic Growth, Inflation

The present study builds upon the seminal work of Engel and West [2005, Journal of Political Economy 113, 485-517] and in particular on the relationship between exchange rates and fundamentals. The paper discusses the well-known puzzle that fundamental variables such as money supplies, interest rates, outputs etc. provide help in predicting changes in floating exchange rates. It also tests the

- by Stelios Bekiros
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- Applied Mathematics, Political Economy, Time Series, Cross Correlation

This study employs the cointegration technique and the granger causality test to examine the impact and the causal relationship between money supply and economic growth in Nigeria using annual time series data spanning 1980 to 2017. After critical exploration of both the theoretical and the empirical literature, the study concludes that money supply has a positive impact on economic growth. This is evidenced by the presence of cointegrated and long-run relationship among the variables. In addition, the Granger causality test shows the existence of unidirectional causality running from money supply to economic growth, hence result is consistent with numerous empirical literature. As such, government should put in place other policy measures that would encourage the effective workings of money supply in Nigeria. This may include proper engagement of monetary management to ensure that increase money supply does not lead to economic disorder in the long-run.

- by Miftahu Idris
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- Money Supply

This study aims to better understand the role of centralized and decentralized ledgers in the money supply process. The aim is to highlight the strengths, weaknesses, opportunities, and threats of these tools in the context of finance and banking. A thorough investigation of the prior literature was carried out using sources extracted from various academic databases. A SWOT analysis based on an integrative literature review methodology was conducted to synthesize various research contributions and analyze relevant information related to centralized and decentralized ledgers. The findings reveal that centralized ledgers are still critical in the record-keeping of financial transactions, despite the strengths and opportunities of decentralized ledgers outweighing those of centralized ledgers. This study helps to increase the understanding of financial and banking sector managers concerning the importance of decentralized ledgers in delivering more value to customers.

- by Abderahman Rejeb
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- Money Supply, Cryptocurrency, Fianancial Management, Blockchain

The process of deterioration in the fundamentals, in particular those related to inflation and the public sector deficits, that had started in the 1980's have accelerated in the 1990's. Meanwhile two way causative relations seem to have appeared between the fluctuations of some fundamentals. In this context, this paper examines the long term relationship between inflation and the public sector deficit and provides an analysis of the macro dynamics that derive from this relationship. Following a summary of the theoretical literature on the relationship between inflation and the public sector deficit, the behavior of these two variables in the 1975-2014 periods are delineated and an analysis of their relationship to some selected macro-variables is presented. The most important result of this article is that high and chronic inflation rates are one of the responsible of deterioration which appeared on the main economic variables particularly in the public sector balance. Similarly, in the 2000's, on the basis of positive developments in the public balance lies in falling inflation rates quickly and permanently.

- by Atilla Gökçe and +1
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- Economics, Development Economics, Econometrics, Macroeconomics

The paper examines two different aspects of macroeconomic behavior in the United States during the period between 1929 and 1941 --both the proximate determinants of the severity and duration of the slump in nominal income, and the factors influencing the division of those changes in nominal income between changes in the price level and in real output. The first question, the sources of nominal-income movements, has been the subject of much recent controversy and debate. the statistical analysis in the paper suggests that both extreme monetarist and nonmonetarist interpretations of the decade of the 1930s are unsatisfactory and leave interesting features of the data unexplained. The paper takes the intermediate view that both monetary and nonmonetary factors were important, and places considerable emphasis on the interaction among construction, consumption, the stock market, and the Hawley-Smoot tariff, in its explanation of the severity of the first two years of the contraction.

- by James A Wilcox
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- Great Depression, Monetary Policy, Developing Country, Phillips curve

Several studies related to the role of the money in production function has been performed in several countries, particularly in developing countries. This study aims to analyze the role of money in the production function, case in Indonesia, with translog models of conventional production function in the long term. The data used in the study are data on the manufacturing industry in Indonesia in year 2000 quarter 1 to year 2013 quarter 1.

- by Raditya Nugraha
- •
- Economics, Monetary Economics, Econometrics, Cointegration

How can a particular allocation and prices be implemented? Under what conditions does a policy deliver a unique competitive equilibrium? How many degrees of freedom there are in the determination of the policy variables, or how many are the instruments of policy? In this paper we analyze a standard dynamic general equilibrium monetary model and determine the conditions on fiscal and monetary policy under which there is single equilibrium. We first obtain that in general, when taxes are chosen in order to satisfy the government budget constraint for all prices and quantities, policy must include exogenous rules for both money supply and interest rates in order for there to be a single equilibrium. However, there are particular interest rate feedback rules, or money supply rules, that guarantee a unique equilibrium. We consider alternative fiscal policy rules and extend the analysis to environments with sticky prices. We obtain similar results for particular restrictions on the settin...

- by Bernardino Adao
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- Monetary Policy, Rule Based Fiscal Policy, Interest Rate, Money Supply

Using innovation accounting in a structural vector autoregressive model, it is established that monetary authorities in Malawi employ hybrid operating procedures and pursue both price stability and high growth and employment objectives. Two operating targets of monetary policy are identified, viz., bank rate and reserve money, and it is demonstrated that the former is a more effective measure of monetary policy than the latter.

- by Harold Ngalawa
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- Economics, Monetary Policy, BanK Lending, Exchange rate

The paper uses the standard probit model proposed by , as well as the modified probit model suggested by , to examine the ability of the yield curve to predict recessions in South Africa, and compares its predictive power with other commonly used variables such as the growth rate of real money supply, changes in stock prices and the index of leading economic indicators. Results presented in the paper provide further evidence that the yield curve, as represented by the yield spread between 3 months and 10-year government paper, can be used to estimate the likelihood of recessions in South Africa. Results from the standard probit model and the modified probit model are somewhat similar, although the latter model improves forecasts at shorter horizons up to 3 months. Compared with other indicators, real M3 growth does not provide much information about future recessions, whilst movements in the All-Share index provide information for up to 12 months but do not do better than the yield curve. The index of leading economic indicators outperforms the yield spread in the short run up to 4 months but the yield spread performs better at longer horizons.

- by Melvin Khomo
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- Economics, South Africa, Stock Price, Growth rate

This research examines the impact of crude oil price and money supply on Malaysian stock price. In this research, multiple regression technique is applied using monthly data from January 2009 to December 2013 of Brent crude oil price obtained from Federal Reserve Economic Data (FRED) Database, money supply acquired from the Monthly Statistical Bulletin published by Bank Negara Malaysia and FTSE Kuala Lumpur Composite Index (FBM KLCI) sourced from Wall Street Journal. The empirical findings of this research exhibit the evidence of positive influence of crude oil price and money supply on Malaysian stock price.

- by Audery Chan Leenee
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- Malaysia, Crude Oil, Stock Price, Money Supply

We propose an improved version of fractional reserve banking and thus put an end to commercial bank's role as creator of money in the economy. In the new method, this duty is entrusted with central banks and thus ensures greater financial stability. It has sound structure and is non-inflationary by nature. Above all, it's a sustainable proposition with greater social and economic benefits for the society. We also propose an essence market concept. JEL CODES: E50, E51, E58, G01, G21, G23, G28,

- by Vijimon Oorkolil
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- Fractional Reserve Banking, Central Banking, Money Supply, Money Creation

This paper reviews the main policy and analytical issues related to currency substitution in developing countries. The paper discusses, first, whether currency substitution should be encouraged or not; second, how the presence of currency substitution affects the choice of nominal anchors in inflation stabilization programs; third, the effects of changes in the rate of growth of the money supply on the real exchange rate; fourth, the interaction between inflationary finance and currency substitution; and, finally, issues related to the empirical verification of the currency substitution hypothesis.

- by Guillermo Calvo
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- Developing Country, Real Exchange Rate, Money Supply, Currency Substitution

This study explores the affect of India's exchange rate with US on Indian trade balance over the period of 1965-2008. We use ARDL bounds testing approach to cointegration and for dynamic analysis IRFs and VDs. For dynamic analysis impulse response functions and variance decompositions are used. We find cointegrating relationship among the tested variable, positive impact of depreciation in Indian rupee against US dollar and trade policies in previous period on Indian trade balance while an negative impact of money supply and economic growth on trade balance in short span of time. Moreover, J-curve is validated in case of India with US.

- by Muhammad Shahbaz
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- Economics, International Economics, Economic Growth, Dynamic Analysis

This study, using currency demand model, finds Australia’s underground economy to be around 2 to 3 per cent of gross domestic product. We extend the related literature (see, inter alia, Bajada, 1999 and Breusch, 2005) in three novel ways. First, we use Austrian levels of taxes and welfare payments as the minimum levels of taxes and welfare payments. Secondly, we

- by Prasad Sankar Bhattacharya
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- Underground economy, Taxes, Money Supply, Gross Domestic Product (GDP)
- by gilles dufrenot
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- West Africa, Monetary Policy, Optimal Fiscal and Monetary Policy, Dutch Disease

This paper analyses the connection between the assumptions often made on the utility functions of economic agents when general equilibrium is considered. Concretely, we analyse the effect of certain assumptions regarding the elasticity of marginal utility for both the existence of equilibrium and, assuming equilibrium exists, for the effect that raising the nominal interest rate has on the equilibrium inflation rate. Typical macroeconomic wisdom states that an increase in the interest rate will decrease inflation, and this seems to have been the basis for real-life macroeconomic policy in several countries. However, this wisdom is based on models in which the money supply, and not the interest rate, is the policy instrument. Using a very simple general equilibrium model of intertemporal consumption, this paper finds sufficient conditions for the negative relationship to hold (and for it not to hold) in the short run, when monetary policy is characterised by a given nominal interest rate. Above all, it is shown how the relative risk aversion characteristics that are assumed of the economic agents are important.

- by Richard Watt
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- Economics, Applied Economics, General Equilibrium, Monetary Policy

In this chapter we estimate the Swedish money supply and its components for the whole period 1620–2012. First we make a brief description of the Swedish monetary history. The Appendix (pp. 320-332) contains our estimate for the Swedish... more

- by Anders Ögren and +1
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- Monetary history, Money, Sweden, Money Supply

El objetivo de este trabajo es aportar una mirada global a las principales características de la política monetaria entre 1931 y 1959 relacionando los cambios ocurridos con el contexto nacional e internacional. Las transformaciones más importantes abarcaron dos dimensiones. Por un lado, el rol cada vez más significativo y determinante del Banco de la República Oriental del Uruguay (BROU) en la conducción de la política monetaria y cambiaria. La otra dimensión relevante fueron los cambios introducidos en el sistema de emisión como principal mecanismo de acción de la política monetaria, que revelan la transición hacia una política donde se prioriza la flexibilidad a través de la introducción de puntales de emisión ligados a fuentes internas, reemplazando la rigidez característica del régimen de patrón oro. En la evolución del sistema de emisión, desde fines del siglo XIX, se identifican cuatro etapas: un sistema metálico hasta 1929; una transición desde 1930 hasta 1934; entre 1935 y 1946 un período caracterizado por el surgimiento de puntales internos y los dos revalúos; y los últimos años del período hasta 1959 donde los redescuentos adoptan un importante papel en la política monetaria. Por otra parte, se describe la evolución de los principales agregados monetarios, la vinculación de estos con el nivel de actividad y una primera aproximación al efecto del dinero sobre los precios.

- by Carolina Román
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- Monetary Policy, Gold Standard, Money Supply, Exchange Rate Policy

- by Aviral Tiwari
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- Economic Growth, Dynamic Analysis, Trade Policy, Impulse response

Abstrak : Pertumbuhan pasokan uang akan terus menyebabkan peningkatan harga yang sama besarnya, namun perubahan dalam tingkat inflasi jangka panjang tidak mempengaruhi tingkat output kerja dan harga relatif berbagai barang dan jasa. Dalam sistem ekonomi makro, jumlah uang beredar diatur oleh pemerintah dan sistem perbankan. Keputusan pemerintah mengenai pasokan uang yang harus tersedia adalah merupakan hal penting untuk menentukan jumlah uang yang beredar. Di samping itu, jumlah uang beredar juga ditentukan oleh sistem perbankan dalam membuat giro, sebagai simpanan untuk pemilik atau dalam menyetujui pinjaman.

- by AGUNG ARJUNA
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- Electrical Engineering, Algebra, Chemistry, Instructional Design

This study analyses broad money supply in Nigeria using a pure portfolio approach in order to establish an econometric framework which forecasts the Nigerian money multiplier with great precision. Methodologically, the Generalized Method of Moments (GMM) model was modeled to analysis the nature of the framework, where broad money supply is presumed to depend upon changes in various indicators of supply of money and a list of instrumental variables (IV) which were estimated over the period 1970-2010. Integral to this process is to determine if there exist a stable relationship between various measures of money supply, the monetary base and the instrumental variables, given a switch by the Central Bank from a direct to an indirect policy regime. In the results, it was found that there exist partial stable relations between these measures of money supply: the broad money and base money despite regime shifts over the sample period. However, a stable money multiplier was not found. This approach produced a scientific framework that could be used to predict the money multiplier derived from the broad money and could be used to forecast on an annual basis with reasonable accuracy at least in the medium term and projections in the monetary programme.

- by Ernest Simeon Odior
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- Macroeconomics, Nigeria, Money Supply

The money supply is an essential full-scale financial variable which basic for better administration of the fiscal area of the nation. This study fills the existing research gap in money supply analysis in Bangladesh by using advanced econometric tools like causality tests and error-correction models in addition to stationarity and co-integration tests with the most recent data. Throughout the years, the increase in money supply is associated with an increase in real GDP, rate of inflation, rate of interest, and depreciation of exchange rate. This paper investigates the causal nexus between broad money supply and other macroeconomic variables. ADF and Phillips-Perron test has been carried out to check the stationarity of the variables. The entire model has been found as co-integrated using the Johansen-Juselius test for co-integration. A normality test has also been carried out. Besides, the Granger causality test has been applied to examine the causal relationship among broad money supply and other macroeconomic variables. Reverse causation from broad money supply to both real GDP and the rate of inflation has been found.

- by Sheikh A Kader and +1
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- Bangladesh, Inflation, Money Supply, Macroeconomic Variable