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Read the Full Article - Independent Institute
Read the Full Article - Independent Institute

Articles The Triumph of Monetarism?
Articles The Triumph of Monetarism?

... triumph came as the NAIRU grew very large and the multiplier grew very small in both journals and textbooks. Its policy triumph came as both the Bank of England and the Federal Reserve declared that henceforth monetary policy would be made not by targeting interest rates but by targeting quantitativ ...
Some observations about the endogenous money theory
Some observations about the endogenous money theory

... of money could be explained by the decision of the central bank to fix as an intermediate objective a certain interest rate level and to create all the money that the public demands at that rate of interest. The endogeneity theory developed by Kaldor and the post-keynesians applies to a world having ...
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... goods also go up which leads to inflation. That’s call cost push inflation. Simply we can say when the price of factor of production increase it increase the prices of goods and services. Factor of production (land, Labor, Capital and Enterprise). ...
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... however, can have an effect on the incentives for central banks to control inflation and, more directly, on inflation developments in the short and medium runs. Kenneth Rogoff (2003) argues that globalization has led to greater price flexibility, which has reduced the ability of central banks to us ...
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... e. Interest payments on the national debt exceed spending on goods and services. 2. A high marginal propensity to consume implies which of the following? a. A small change in consumption when income changes b. A high savings rate c. A high marginal tax rate d. An equilibrium level of income near ful ...
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... a. Incorrect. An increase in the money supply shifts the aggregate demand curve (AD) leftward and move the economy further away from potential real GDP. b. Correct. An increase in federal government spending (G) shifts the aggregate demand curve (AD) rightward toward potential real GDP. c. Incorrect ...
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... basically two saving options. One would pay an interest rate of 4% while the other paid an interest rate of 4½%. The graph on Page 6 shows the demand for and supply of Japanese yen. In 1980, the equilibrium price (exchange rate) was approximately 125 Japanese yen for $1 (P1) or $0.008 for one Japane ...
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... have been the subject of a growing body of literature—economic and non-economic alike (see Piketty 2014; Taibbi 2014; Stiglitz 2013; Reich 2013; Wilkinson and Pickett 2009). While the experience of the Great Recession and the ensuing discussion of grotesque inequality have made it obvious that the p ...
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Money supply

In economics, the money supply or money stock, is the total amount of monetary assets available in an economy at a specific time. There are several ways to define ""money,"" but standard measures usually include currency in circulation and demand deposits (depositors' easily accessed assets on the books of financial institutions).Money supply data are recorded and published, usually by the government or the central bank of the country. Public and private sector analysts have long monitored changes in money supply because of its effects on the price level, inflation, the exchange rate and the business cycle.That relation between money and prices is historically associated with the quantity theory of money. There is strong empirical evidence of a direct relation between money-supply growth and long-term price inflation, at least for rapid increases in the amount of money in the economy. For example, a country such as Zimbabwe which saw extremely rapid increases in its money supply also saw extremely rapid increases in prices (hyperinflation). This is one reason for the reliance on monetary policy as a means of controlling inflation.The nature of this causal chain is the subject of contention. Some heterodox economists argue that the money supply is endogenous (determined by the workings of the economy, not by the central bank) and that the sources of inflation must be found in the distributional structure of the economy.In addition, those economists seeing the central bank's control over the money supply as feeble say that there are two weak links between the growth of the money supply and the inflation rate. First, in the aftermath of a recession, when many resources are underutilized, an increase in the money supply can cause a sustained increase in real production instead of inflation. Second, if the velocity of money (i.e., the ratio between nominal GDP and money supply) changes, an increase in the money supply could have either no effect, an exaggerated effect, or an unpredictable effect on the growth of nominal GDP.
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