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Chain effects when Money Demand is greater than Money Supply

Always keep in mind that the total quantity of money in the economy is not altered by the attempts of individuals to change their own holdings of money. The currency or checking account balance that ...
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Why does a decrease in interest rate reduces the velocity of money circulation?

Seems to me the relationship is inverse. If interest rates went to, say, 20%, I'd be buying a lot less stuff and putting more into savings. Further, economic investment projects of all types would be ...
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Is is possible that two economies have the same real interest rate, same GDP growth, but different inflations?

This is just a conceptual thought experiment. Is it possible that two countries have the same real interest rate, same GDP growth, but different inflation, one higher, one lower? Yes it is possible. ...
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Monetary Policy - How can increasing interest rates cause higher inflation in the short term?

Businesses have debts or liabilities, interest is an expense that's likely to be passed on to consumers in the form of increased commodity prices. This will result in inflation in the short term. ...
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1 vote

Why does the dollar seem weak?

FX is essentially a random walk, especially USD. You can look here for a lot more details. In essence, you can always tell stories afterwards, like people expected that move and it was already priced ...
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How do interest rates relate to stock prices?

1muflon1's answer is comment, but I thought to add a short simple answer. Your quotation is referring to the Federal Reserve's and other central banks' expansionary monetary policy. Central bankers ...
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2 votes

Is supply-caused inflation different from demand-caused inflation

The increase in M2 in the last 2 years caused by the Fed appears to be one of the main causes of the current inflation in the U.S. There should be a third option central-bank-caused-inflation (which ...
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2 votes

Is supply-caused inflation different from demand-caused inflation

Inflation can be caused by a significant increase in money supply and credit expansion. If this increase is not accompanied by a corresponding increase in the supply of goods in the market, the prices ...
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Is supply-caused inflation different from demand-caused inflation

Is supply-caused inflation different from demand-caused inflation Trivially there is difference, "supply-side" (properly known as cost-push) inflation occurs when there is drop in aggregate ...
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The Fed's repo amount and TGCR shows positive pearson correlation. How so?

You need to understand the context. In the fall of 2019, the TGCR began moving upwards, because the banking system became short of reserves as the Federal Reserve was conducting Quantitative ...
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