Questions tagged [money]

any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context, or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment. Any item or verifiable record that fulfills these functions can be considered as money.

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1answer
28 views

How does hedging using futures work?

I can't understand how it makes sense. From what I've read, corn producers (for example) sell their corn at current price but deliver the corn later, in order to protect themselves from decline in ...
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230 views

Is human psychology really reflected into inflation?

I am a total noob in economics, but I'm trying to understand why do we have inflation. I can see that prices are increasing over time and, by definition, this means inflation. I'm fine with this ...
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Does inflation equal change in M1 or M2?

According to monetarism, inflation can be predicted precisely by the change in money supply and GDP growth. Does "money supply" here refer to M1 or M2, i.e. does it include debts created by ...
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Value of money (incomes) question - what is the “r” here?

I would like some help with a fairly basic "value of money" question. (I'm very much a beginner in this field so please bear with me.) I'm writing about income changes throughout a decade (2010-2019)....
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Exogenous variables and money

What are the exogenous variables that drive demand for and supply of money? Are there variables in common between the two? I think I'm getting caught up with interest rates, as adjusted by the Feds vs ...
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Help finding historical data for velocity of money (M1 or M2) for any country except USA

Can anyone point me to a data set of money velocity for at least 20 years back for any other country than the US?
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44 views

Who looses Forex if someone gains?

My understanding of forex exchange is that when there are two currencies cur1 and cur2, they are balanced in the world with a ...
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103 views

Fed must hold collateral equal in value to notes in circulation

The Fed's website has a FAQ "Is U.S. currency still backed by gold?". Part of the answer writes: The Congress has specified that Federal Reserve Banks must hold collateral equal in value to the ...
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247 views

Are there any countries in which post-dated cheques are commonly used in trade?

I am reposting from the Personal Finance & Money Stack Exchange because my question was flagged as being about economics and off-topic. The post-dated cheque is the most common payment instrument ...
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103 views

Effect of money supply on price level

Consider a macroeconomy defined by following equations: $$M = kPy + L(r)$$ $$S(r) = I(r)$$ $$y = m $$ Where $M$ is money supply, $P$ is price level, $y$ is output, $r$ is interest rate, while $k,m$ ...
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42 views

M1 Money supply data?

Why do these M1 Money supply charts show data only up to 7th May, when the Fed data is released weekly? https://fred.stlouisfed.org/series/M1 http://schrts.co/zgaAPi Thanks
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Why is the annual transferred money worldwide quite different?

The source below says "According to this document from the US Treasury, SWIFT handles about \$5 trillion per day, or given about 250 business days per year, about \$1.25 quadrillion dollars a year.". ...
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139 views

What is a dollar, currently?

What is the definition of a dollar now without gold backing? It seems that a dollar is now just an entry in a book somewhere in some bank. Or it is the federal reserve note? Or is it both? I ...
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Has anyone developed a good methodology for high-frequency inflation nowcasting?

Let's say I want to know what happened to the value of the U.S. dollar between three minutes and two minutes back from ... NOW. I have given myself a two minute slack period for data collection and ...
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Time series for contrasting empirically money demand and Taylor rules series

Non-cashless New-keynesian models often include discretionary monetary policy expressed as a Taylor rule: $1+i_t = (1+i)\left(\frac{1+\pi_t}{1+\pi}\right)^{\phi_\pi}\left(\frac{y_t}{y_t^n}\right)^{\...
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How can money have a value? [duplicate]

The value of money can be the value to produce it. It costs, say, 1, to produce 10 000 000, in the mean (coins and paper, though digital money costs virtually nothing). This is called the extrinsic ...
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2answers
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How does paying off debt to the bank work?

So, I understand that banks create money by making loans which end up as deposits. But what I don't get, is how paying off debt works in the big picture. Let me explain. Let's say Jim got a loan of \$...
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What's wrong with printing more money [duplicate]

Suppose a government is in debt, why will there be inflation if it makes more money and pay other countries borrowed money back?
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70 views

How does total money in the economy changes?

I don't understand why total money in economy increases. Where does this money come from?
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Does the income from a product or art count as passive income?

When a writer publishes his book, can we classify the income from the book as passive? Or another example, when a musician publishes his album, does the album generates passive income, making any form ...
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26 views

What happens if you cannot lend more than what you have?

This is hypothetical but what would happen if you cannot lend more money than you have? Say you have £100, the maximum you can lend is £100. But somehow you lend £200 to Joe, and Joe spends all of it ...
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27 views

demand for money

I am currently studying the demand for money by Blanchard. this model assumes that the amount of money held is basically related to transaction levels and the the attractiveness of bonds. i.e.: ...
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25 views

What would be the costs of declaring/legislating that Scottish banknotes be legal tender?

Bank of England: English banknotes aren’t legal tender in Scotland. Scottish notes aren’t legal tender in England or Scotland. Committee of Scottish Bankers: Scottish Bank notes are not Legal ...
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What were the effects of the 2016 Indian banknote demonetisation?

On 2016-11-08, the Government of India announced that it had: decided to cancel the legal tender character of the High Denomination bank notes of Rs.500 and Rs.1000 denominations issued by RBI till ...
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219 views

difference between demand for money and credit

As far as I understand in both cases we are seeking money that we don't have and would like to borrow. That being said what I find even more misleading is the fact that as a nominal interest rate ...
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1answer
127 views

Forward Guidance - What happens when the FED unloads its balance sheet

Please Excuse my ignorance. The US Federal Reserve has issued forward guidance telling the world that it is going to start to sell its (well a little less) 4.5 trillion dollars worth of securities ...
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Is there a standard for job sectors?

Is there any sort of recognised standard (e.g. ISO) for grouping jobs into job sectors e.g. 'technology', 'emergency services'? I asked this on StackOverflow here and they suggested this SE. Would ...
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69 views

Are things any better in what society considers “third world countries” as they were years ago? If things are better, how did they improve and why?

For years I've seen non-stop commercials of countries in the continent of Africa showing kids who live in sewage huts, parents are dead, war gangs and criminals rule their lives. Like in Captain ...
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Is the debt owed to resourceful producers by resourceless consumers practically irrepayable?

Here is my argument for the debt owned by resourceless consumers to resourceful producers (as currency, bonds, loans, or other means). Is it correct? If not, where am I going wrong? Economic value is ...
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1answer
20 views

Why has M1 shoot up?

M1 has increased massively during the current pandemic. Below is an image from Fred St. Louis. Similar picture emerges from other countries. According to Fed data, the increase is due to a rapid ...
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1answer
859 views

Series 2013 US dollar bills [closed]

it's 2015 now but still, I can't find any USD bills of 2013 series. All my bills are 2009 series (not even 2009A series). I'm looking for 100 dollar denomination. what's the latest series for USD ...
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How can a non-fiat currency be backed by gold?

Question is really simple- The value of gold is it self controlled by supply-demand, which insinuates that gold is fiat, only valued because people accept it and not because it has a use case. from ...
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130 views

Would taxing money owned (as a share of purchasing power) be a better form of taxation?

Consider a nation whose money is entirely digital (like Bitcoin), but centralized (unlike Bitcoin). Furthermore, the total money supply is fixed, i.e. money cannot be created nor destroyed. To be ...
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Why don't we mint more m0 instead of creating m1 through fractional reserve banking?

From what I understand, m1 money is just as liquid as m0 since an individual can withdraw it from the bank at any time and in any quantity (up to the amount (s)he deposited). Because of this I don't ...
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The reasons I believe the bimetallic dilemma was never possible

During the bimetallic era, there was always a dilemma where the mint ratio differs from the market ratio of their metallic value. I state this is impossible. Suppose the mint&market ratio of ...

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