China's Easily Overlooked Monetary Transmission Mechanism: Monetary Reservoir
In: CHIECO-D-22-00289
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In: CHIECO-D-22-00289
SSRN
In: International journal of political economy: a journal of translations, Band 40, Heft 4
ISSN: 1558-0970
Standard monetary policy is grounded in the quantity theory of money, which links changes in the general price level to excess money that would induce excess demand on the goods market. This article shows that this theoretical foundation is misleading and harmful to growth. This is so because price determination is multifaceted. Central banks, especially the European Central Bank, currently tighten credit conditions whereas money is not an issue. In this way, they act not only on demand but also on the supply of goods. The additional reference made to rational expectations is an aggravating factor. Is there another way to conduct monetary policy? In this article it is argued that circuit theory, which endorses Keynes's dismissal of the quantity theory of money and his proposal to instead consider money flows in relation to the formation and spending of incomes, provides a substitute for standard monetary policy. Inflation and deflation could be avoided through a new structural arrangement of banks' monetary and financial operations. Adapted from the source document.
In: IMF Working Papers
In: IMF working paper WP/07/7
Since the early 1990s, the IMF has been advising countries to shift to the use of indirect instruments for executing monetary policy. This paper provides information about a monetary policy instruments database, maintained by the Monetary and Capital Markets Department of the IMF. We offer an overview of the information contained in the database in the form of comparative summary tables and graphs to illustrate the use of monetary policy instruments by groups of countries (developing, emerging market and developed countries). The main trend that can be identified from the database information
In: FEDS Notes No. 2018-05-18
SSRN
Working paper
In: Revue économique, Band 24, Heft 5, S. 889
ISSN: 1950-6694
In: The Economic Journal, Band 82, Heft 325, S. 253
This paper develops a business cycle model with a financial intermediation sector. Financial wealth is defined as a predetermined state variable. Both, the additional sector of financial intermediaries and predetermination of financial wealth, affect the demand for real financial wealth. If real financial wealth also enters the monetary policy rule, the conditions for stability and uniqueness of the macroeconomic equilibrium path change fundamentally compared to standard New Keynesian business cycle models. Here, real financial wealth is interpreted as a real broad monetary aggregate. Furthermore, different interest rate rules and their consequences for stability and uniqueness of the macroeconomic equilibrium path are considered. Two monetary policy rules are found to be feasible - i.e. if these monetary policy rules are applied there exists a stable and unique macroeconomic equilibrium path. Simulations of the model showed that the monetary policy rule considering inflation and broad money as indicators is optimal.
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SSRN
In: The Limits of Fiscal, Monetary, and Trade Policies, S. 23-34
In: The Economics of International Integration 5th Ed
In: The Australian economic review, Band 14, Heft 2, S. 22-28
ISSN: 1467-8462
In: The Australian economic review, Band 6, Heft 1, S. 27-32
ISSN: 1467-8462
In: Politics and Policy in Traditional Korea, S. 160-175
In: The Legal Protection of Foreign Investment : A Comparative Study