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Why didn't M1 grow much during 1970s inflation?

Inflation does not necessarily depend on M1 but broader monetary aggregates. Standard monetary aggregate in inflation research is M2, M1 is rarely used and it is irrelevant here because it does not ...
1muflon1's user avatar
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2 votes
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How do reserve balances held by the banks at the fed show up on their balance sheet?

You do have a misunderstanding but perhaps not the one you thought. The total amount of reserves in the banking system is controlled mostly by the size of the Fed balance sheet. As you know the Fed ...
dm63's user avatar
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2 votes
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What is the argument that suggests to the Federal Reserve that it is reasonable to cause a recession in order to prevent inflation?

First, it is not necessary for Fed to cause recession. Inflation is typically symptom that economy is operating above its sustainable capacity (natural level). Theoretically, if fed is careful with ...
1muflon1's user avatar
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2 votes
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MMT suggests that taxation can be used to fight inflation. What would be an argument against this suggestion?

The standard economics story, as I understand it, is that deficit spending increases inflation because it is increasing demand chasing limited supply. Yes this is more or less correct. In standard ...
1muflon1's user avatar
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1 vote

MMT suggests that taxation can be used to fight inflation. What would be an argument against this suggestion?

One problem with raising taxes to combat inflation is that the increased tax rates really don't translate into much, if any, additional revenue for the government. This is for three main reasons. ...
Aristocratic Jack's user avatar
1 vote

Why didn't M1 grow much during 1970s inflation?

I think we are looking at 2 different charts. 1960-1970 the money supply went from 140 billion to 200 billion. A 42% increase. 1970 to 1980 the money supply went from 200 billion to 385 billion. A 92% ...
Questor's user avatar
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1 vote

What's the best measure of liquidity or money inside the market?

What's the best measure of liquidity ... inside the market? For liquidity there is theoretically no best measure. Based on context different measures can be considered best. Common measures that are ...
1muflon1's user avatar
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1 vote

Instead of quantitative easing why wouldn’t Stimulus at Checkout (SAC) work?

The SAC is a direct fiscal stimulus. The Fed is not allowed to do that- fiscal policy is controlled by Congress. The Fed is only allowed to take monetary action, such as lowering rates or buying ...
dm63's user avatar
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1 vote

How does the Fed supervise and regulate foreign branches of its member banks?

What we know is that foreign branches of US banks are part of the bank, not a separate entity , so indeed the Fed directly regulates them as a consolidated part of the overall bank. What we do not ...
dm63's user avatar
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1 vote

A question about Ihrig et al. (2015) and the Fed's policy implementation prior to 2008

The reason for this is that prior 2009 the interest rate on reserves was not zero and Fed kept reserves scarce. The top of the demand curve is censored by the discount rate, which is an effective ...
1muflon1's user avatar
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1 vote
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Does anybody know why the Fed Funds Effective Rate has 3 evenly spaced dips in between every FOMC meeting, that suddenly stop on March 21st 2018?

The observed pattern is essentially (regulatory) arbitrage by banks. 1 ) One such concern is "window-dressing", in the form of temporary reductions of transaction volumes in key financial ...
AKdemy's user avatar
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1 vote

What is the argument that suggests to the Federal Reserve that it is reasonable to cause a recession in order to prevent inflation?

Higher inflation economies seem to have more absolute volatility in their inflation rate. This is confirmed if you look at the inflation rate graphs of Argentina and Turkey. Naturally absolute ...
H2ONaCl's user avatar
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