Some Alternative Monetary Facts

Some Alternative Monetary Facts
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Volume/Issue: Volume 2021 Issue 006
Publication date: January 2021
ISBN: 9781513566429
$18.00
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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Inflation , Money and Monetary Policy , money aggregates , monetary financing , central bank balance sheet , WP , bank reserves , interest rate , financial market , balance sheet expansion , money demand

Summary

In this paper, we discuss the modern history of monetarism and its alternatives, as well as the changing empirical relationship of various measures of money and inflation. After demonstrating that previous naïve correlations between money and inflation as established in the 20th century literature have largely disappeared, we explain why this cannot be taken as support for an increased reliance on permanent monetary finance. Rather, we argue that rapid technological innovation in payments systems—both public and private—including in global pledged collateral markets, portends a declining demand for central bank liabilities.