All Questions
Tagged with quantity-theory-of-money monetary-policy
12 questions
0
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What's exactly the T/Y value in the Quantity Theory of money simplified equation: MV=PT or MV=PY?
I understood the basic fundamental principle of the theory, that all things being equal, a change in the money supply affects price level.
Yet, now I am trying to understand this statement ‘ The QTM ...
- 1
1
vote
1
answer
42
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To what extent can cryptocurrencies be influenced by monetary policy?
Background
In modern economies, at least up until ~10 years ago, it was assumed that a currency would be technically able to be subjected to monetary policy, that is, where more money is created or ...
- 671
0
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1
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39
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I there an established correlation between Federal Reserve balance sheet and MB( monetary base)?
More precisely:
Are there any implied bounds for the ratio M0/FRBS with
MB= the monetary base
and
FRBS=Federal Reserve Balance Sheet?
https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
...
1
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2
answers
272
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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 ...
- 19
0
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1
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74
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Equation of exchange and inflation target
The inflation target is $2$% and the equation of exchange states $MV=PQ$. Is the idea that we want to have greater money supply growth then real growth in general?
- 197
4
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4
answers
557
views
Why does an economic slowdown lead to deflation?
Usually economists say that in recession there is deflation, so increasing the money supply does not lead to a high level of inflation.
According to the Quantity theory of money, the price level is ...
- 618
0
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1
answer
1k
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Velocity of M1 versus M2 money
According to Pablo Kurlat's textbook on Macroeconomics, the graph of Ch 13 compares the velocity of M1 and M2 over the years. I don't understand why M1 velocity exceeds M2 even though M2 includes more ...
2
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0
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25
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Who profits from monetary expansion?
Is my understanding correct:
In history (ancient, medieval) money was directly created by governments, therefore any monetary expansion meant 100% net profit for government, which could be used to ...
- 121
2
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3
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672
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Why do many economists believe that money is neutral in the long run?
If a central bank carried out monetary policy that consisted of multiplying each person's wealth by a common factor, I would find it plausible that all prices would get multiplied by the same factor ...
- 121
2
votes
2
answers
819
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What is the effect of expansionary fiscal policy in case liquidity trap situation?
I've read that liquidity trap means interest rate is at its minimum and increase in real money stock will not lead to fall in interest rate because people will be demanding whatever the amount is ...
- 249
3
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0
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76
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Why is money super neutral in Brunnermeier and Sannikov's I theory of money?
I'm wondering why money is super neutral in Brunnermeier and Sannikov's "I-theory of money", but is not super neutral in their 2016 AER paper "On the optimal inflation rate".
In the I-theory of money,...
- 31
0
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1
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183
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How does burning a huge amount of cash money affect the monetary supply? [duplicate]
I am not an economist by default. In other words, I am a newbie here.
Assume there is an extremely rich man who withdraws an extremely huge amount of cash money. He then burns all of it.
How does ...
- 101