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The Costs and Implications of PBC Sterilization John Greenwood
The Costs and Implications of PBC Sterilization John Greenwood

... China, Taiwan’s central bank, used no less than five instruments (treasury bills, CDs, and savings bonds all issued by the CBC, together with reserve requirements on banks’ deposits and reserve requirements imposed on the Postal Savings System) to sterilize inflows. At one stage the volume of steril ...
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... in the rebalancing process based on goods excluding gold, which ground to a halt in the third quarter. Europe’s slowing economy and geopolitical tensions have caused exports to lose some pace. Thus, during October-November, exports excluding gold increased only slightly from the previous quarter, wh ...
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... • A change in money prices of other inputs/resources (such as Changes in world oil prices, Changes in the weather, Technological change) has the same effect on firms’ production plans as a change in the money wage rate. It changes firms’ costs. • If the money prices of other resources rise, the pric ...
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...  Central bank controls the money supply. Quantity theory of money assumes velocity is stable, concludes that the money growth rate determines the inflation rate. CHAPTER 4 ...
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... Key Insight: If the economy experiences unexpected deflation, the opposite happens-borrowers are paying more in terms of lost real purchasing power when there is unexpected deflation. Borrowers, both consumers and firms, will essentially be poorer. (Even though, there is another side of the market - ...
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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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