Suchergebnisse

During the five years of inflation, price stability, and hyperinflation in Germany after World War I, three factors determined the growth of the money supply. First, the Reichsbank freely issued money in exchange for whatever government or corporate debt the private sector did not wish to hold at the official discount rate. Second, the government persistently ran large deficits. Political instability and the inflation itself prevented taxation adequate to pay for social programs, subsidies to the railroad and businesses, and reparations to the Allies. The third factor was expectations of inflation, which, as they became more pessimistic, led people to hold less and monetize more of the outstanding stock of debt. Thus, the money supply was partly endogenous and partly dependent on government fiscal policy. The monetary policy of the Reichsbank, although essential to the inflation process, was a constant and passive one until stabilization at the end of 1923.

The broadly acknowledged notion on inflation is that it is a money related event. Henceforth the decrease of expansion is to a great extent the domain of financial approach. This investigation is carried out with an objective to determine the direction and significance the relationship among money supply and inflation. Consumer price index is used as proxy of inflation while M2 is used to determine money supply in the country. We applied ARDL model to investigate long run relationship among the variables. The data used for this estimation is ranging from 1960 to 2017. Results of the study describe a unidirectional relationship from money supply to inflation. Therefore, a significant and positive long run relationship has established in Iraqi economy. Hence, monetarist point of view is prevailed in Iraqi economy. It is recommended that Iraqi government should tighten its monetary policy to control inflation within an acceptable range.

In the future economic system, as suggested by TOP Tax system, that total money supply (real money and debt money/loan money) to be necessary for circulation in banks should be at the minimum level of 100% and at maximum level 110% of the value of GDP of the country. Out of this total money supply in the economic system, 99.7% of the money will be in dematerialised (non physical) form in the accounts of citizens, Governments and companies. Only small portion of money, equalling just 0.3% of the total money in the economic system, will be in physical form i.e. currency notes or coins. All high valued paper currency notes will be demonetised. This record was migrated from the OpenDepot repository service in June, 2017 before shutting down.