Timeline for Why is the supply curve in the foreign-currency exchange market vertical?
Current License: CC BY-SA 4.0
6 events
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| Dec 9, 2021 at 10:43 | comment | added | csilvia | @Mick you dont know what you are talking about. The question above is question about model with exogenous money supply (look at the money supply curve - it is vertical isn't it? Do you even know what that means?). That paper is about endogenous money creation in real economy, not about model with exogenous money creation. Please read the question, before making off-topic comments. | |
| Dec 6, 2021 at 8:41 | comment | added | Mick | @csilvia: Re: "Central bank is the sole supplier of money in the economy". Not true at all - see bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/… | |
| Jan 4, 2021 at 14:41 | comment | added | Jocka G | Ok, I think I am a bit confused... I thought there were different money markets, one domestic one where the price is determined by an interest rate, and the other being the foreign-currency exchange market with the exchange rate as a price. Otherwise I am not sure what Mankiw and Taylor mean by saying that NCO determines the supply on the forex. | |
| Jan 4, 2021 at 13:23 | comment | added | csilvia | @JockaG what do you mean? Central bank is the sole supplier of money in the economy some of it ends up on forex market. | |
| Jan 4, 2021 at 13:10 | comment | added | Jocka G | So the supply of currency in the foreign-currency exchange market is the same as the supply on the domestic money market? How does the Net Capital Outflow enter the picture then? | |
| Jan 4, 2021 at 12:50 | history | answered | csilvia | CC BY-SA 4.0 |