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Monetary targeting served as a useful tool for conducting monetary policy until 1980s, but the instability in the relationship between money and nominal income led to its abandonment by most economies. One way of measuring this relationship is money velocity, defined as the ratio of nominal income to money. The purpose of the present study is to show that if short-run cyclical factors are accounted for, money velocity function becomes stable and thus any change in monetary aggregates will lead to predictable change in nominal income and therefore inflation. In such a scenario, monetary targeting can serve as a useful tool in the conduct of monetary policy. The study utilizes quarterly data from 1996:Q2 to 2020:Q1 and time series methodology to conduct empirical analysis. Findings show that money velocity and all its identified determinants exhibit pro-cyclical behaviour. After accounting for these determinants, money velocity has been found to be stable. The direction of causality runs from money velocity to rate of interest to investment to GDP. Thus, when formulating monetary and fiscal policies, policymakers can monitor the short-term cyclical patterns in money velocity as an indicator of forthcoming expansionary or contractionary conditions in the economy to design effective policies. [ABSTRACT FROM AUTHOR]

The purpose of the study is to analyze the relative efficacy of monetary and fiscal policies in fostering economic growth in Bangladesh concerning predictability, speed, and magnitude. Moreover, it aims to find the relationship between the economic boom of Bangladesh and two measures of macroeconomic management i.e., monetary and fiscal policy. The ARDL model and bound test are applied to examine the long-term link between monetary policy, fiscal policy, and economic growth. Data is obtained from the World Development Indicator (WDI) for Bangladesh for the period 1974 to 2022. Several diagnostics tests like CUSUM and CUSUMQ are used to identify both the strengths and weaknesses of the models. The findings demonstrated a long-term correlation between the two policies and economic growth. According to the calculated short-run coefficients, the short-term effect of fiscal policy is mentionable but the effect of monetary policy is negligible in the short term. But over time, the immediate effects become noteworthy. The long-term outcomes indicated that both fiscal and monetary policies have a favorable and substantial long-term impact on economic growth. The result shows fiscal policy is more effective compared to monetary policy for making Bangladesh, a role model of Bangladesh. Furthermore, all the diagnostics tests showed the stability of the estimated ARDL model. Expansionary fiscal and monetary policies lead to higher government spending and an increase in the money supply, which raises GDP levels. Conversely, if government spending and the money supply decline (contractionary fiscal and monetary policies), the GDP level falls. As a result, this study suggests using expansionary policies to boost Bangladesh's economy. [ABSTRACT FROM AUTHOR]

The purpose of this research is to explore and summarize aspects of the current state and development trends in Albania's banking sector. The analysis shows that the banking system dominates the country's financial landscape, while the securities market remains nascent. Adverse inflationary dynamics are also observed. The research demonstrates dependencies between key banking indicators like non-performing loans, capital adequacy ratio and money supply on economic factors. The prospects for Albania's banking sector are challenged by the volatile global economy, however promoting lending, improving asset quality and supporting businesses can help establish stability. Expanding the securities market can also assist banking sector growth. The practical significance is that the identified trends and relationships can inform policy decisions to facilitate robust banking sector performance. [ABSTRACT FROM AUTHOR]

We estimate the effect of money supply changes on the real economy by exploiting a recurring natural experiment: maritime disasters in the Spanish Empire (1531–1810) that resulted in the loss of substantial amounts of silver money. We find that negative money supply shocks caused Spanish real output to decline. A transmission channel analysis highlights slow price adjustments and credit frictions as mechanisms through which money supply changes affected the real economy. Especially large output declines occurred in textile manufacturing against the backdrop of a credit crunch that impaired merchants' ability to supply their manufacturers with inputs. [ABSTRACT FROM AUTHOR]

We derive a new theoretical model of money demand, which reflects backward‐ and forward‐looking preferences in consumption and utility. The former aspect is captured by standard habit formation, and the latter by anticipation of future consumption preferences. By introducing both of these into the Ramsey–Sidrauski framework, we unveil a new highly general model of money demand. We discuss the model in light of the apparent breakdown of money‐demand functions and diminished policy relevance of monetary aggregates. [ABSTRACT FROM AUTHOR]

One of the most widely researched macroeconomic relationships is money demand stability, which helps monetary authorities understand what motivates economic agents hold real money balances and whether it can predict inflation. However, endogenous structural shocks to macroeconomic fundamentals have often been criticized for distorting the equilibrium relationship among economic variables. These shocks usually stem from socioeconomic and political changes, behavior of economic agents, and random shocks. We examine the presence of cointegrating relationships between money demand and scale and opportunity cost variables while allowing for multiple endogenous structural breaks in the cointegrating vectors in the Indian context for the period 1996:Q2–2021:Q2. We utilize the Narayan and Popp (J Appl Stat 37(9):1425–1438, 2010) test to identify the break dates in each series and then employ the Maki (Econ Model 29(5):2011–2015, 2012) cointegration approach to establish the presence of long-run relationships between money demand and its covariates. Our study finds the presence of stable long-run relationships in the money demand function, implying that monetary authorities may target narrow and broad monetary aggregates as an indicator or treat them as an information variable to anchor the inflation expectations of economic agents under the current flexible inflation-targeting framework. [ABSTRACT FROM AUTHOR]

The fiscal policy's impact on the real exchange rates is highly controversial in theory and practice but noteworthy for macroeconomic policy. This issue is more pertinent in developing countries with an active fiscal policy or wider fiscal space but is explored less. To our knowledge, the fiscal policy impact on the real exchange rate in India is not documented. Against this backdrop, this study explores this in India involving disaggregated data of government consumption and investment spending and a few related variables like trade openness, private consumption spending, and money supply for the period 1996:1–2023:1. The results corroborate long-run associations of real exchange rate and some combinations of the selected other variables. The real exchange rate dynamics estimated through the cointegrated vector autoregressive model followed by an impulse response analysis have shown that government investment spending causes a real appreciation. In contrast, government and private consumption spending exert pressure to depreciate the real exchange rate. Trade openness is another potent predictor of the real exchange rate. On the other hand, no significant impact of the money supply on the real exchange rate is noticed. The results accentuate effective fiscal allocation may be a policy tool for stabilizing the Indian rupee. The unique findings on the Indian economy may also help understand the fiscal effect of real exchange rates in other developing countries. [ABSTRACT FROM AUTHOR]

This paper contributes to the debate on the re-appraisal of monetization mechanism as a possible tool for dealing with macroeconomic imbalances due to close economic shocks (e.g. the Covid pandemic, the Russia-Ukraine conflict and the escalation in Israel-Hamas crisis). We analyze and empirically discuss the well-known Quantity Theory of Money (QTM), by applying the SVAR methodology to a heterogeneous panel including several Countries (Australia, China, India, Japan, United Kingdom and the United States) plus the block of Euro Zone (EZ) over the period 1992–2022. We investigate the dynamics and the impacts of the variables included in the theoretical model (inflation, GDP growth, money growth and the change in the velocity of money) through the analysis of the macro economic datasets retrieved from the OECD and Trading Economics databases. We find that money growth does not exert the decisive spillover effect on the path of inflation (i.e. common shock) throughout our sample. Moreover, our results indicate that the idiosyncratic component does not show a predominant and determining role of monetary growth in inflationary dynamics. [ABSTRACT FROM AUTHOR]

This paper examines equilibrium asset prices and leverage in an exchange economy populated with both retail and institutional investors. Institutional investors influence the price of the stocks they trade and are aware of the price impact of the opponent and, thus, interact strategically. Because of the price impact, institutional investors decrease their demand for stocks and lend money to the retail sector, thereby increasing leverage in the economy. The risk-free rate (equity premium) tends to be lower (higher) as compared to an economy populated by retail investors only. Retail investors' compensation for liquidity provision depends on the behavior of institutional investors and the state of the economy. [ABSTRACT FROM AUTHOR]

During the 1990s and 2000s, many developing nations accepted fixed exchange rate regimes to sustain price stability. By pegging their currencies to an anchor currency (i.e. US dollar), developing countries could bring credibility and confidence into their economies. The study tries to analyse the impact of the pegged exchange rate regime on inflation in BRICS countries for the period spanning from 2003 to 2022. The result points to the loss of monetary policy autonomy due to the ‘impossible trinity’ coming into play with a steady increase in capital inflows. The country’s large trade surpluses and extensive trade relationships may buffer the impact of exchange rate fluctuations on domestic prices, as changes in the exchange rate may be absorbed by changes in trade volumes or pricing strategies. Other factors like demographic trends or government interventions in markets could overshadow the influence of the exchange rate regime on inflation. The impact of changes in the exchange rate regimes on inflation may operate with lags, meaning that any effects may not be immediately observable in the data. The analysis in this study proposes that exchange rate regimes choice and money supply influence the inflation dynamics in the BRICS countries. It merely reflects the success of the central bank in neutralizing its very effort of maintaining the pegged rate, which gives rise to inflationary growth of the money supply. [ABSTRACT FROM AUTHOR]

In this article, we study the autocorrelation function (ACF), which is a crucial element in time series analysis. We compare the distribution of the ACF, both from a theoretical and empirical point of view. We focus on white noise processes (WN), i.e., uncorrelated, centered, and identically distributed variables, whose ACFs are supposed to be asymptotically independent and converge towards the same normal distribution. But, the study of the sum of the sample ACF contradicts this property. Thus, our findings reveal a deviation of the sample ACF from normality beyond a specific lag. Note that this phenomenon is observed for white noise of varying lengths, and evenforn the residuals of an ARMA( p , q ) model. This discovery challenges traditional assumptions of normality in time series modeling. Indeed, when modeling a time series, the crucial step is to validate the estimated model by checking that the associated residuals form white noise. In this study, we show that the widely used portmanteau tests are not completely accurate. Box–Pierce appears to be too conservative, whereas Ljung–Box is too liberal. We suggest an alternative method based on the ACF for establishing the reliability of the portmanteau test and the validity of the estimated model. We illustrate our methodology using money stock data in the USA. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic, the Russia–Ukraine and the Israel–Hamas conflicts, and the resulting global economic shocks will affect the world economy for several years. This paper analyzes and discusses monetary finance (MF) using the Quantity Theory of Money (QTM) to understand economic dynamics. To achieve this goal, we utilize a Structural Vector Autoregressive (SVAR) identification scheme with sign restrictions on datasets from advanced economies. The findings indicate that monetary growth plays a role in short-term inflationary dynamics, while its effects are less significant in the medium to long term. The aim of the paper is to contribute to ongoing debate surrounding the potential strategies for addressing the economic downturn through the reintroduction of monetary finance (MF). [ABSTRACT FROM AUTHOR]

While credit cards provide transaction services, they have never been included in measures of money supply. We derive the theory to measure the joint services of credit cards and money and propose two measures of their joint services: one based on microeconomic structural aggregation theory, providing an aggregated variable within the macroeconomy; the other a credit‐card‐extended aggregate, optimized as an indicator to capture the contributions of monetary and credit card as nowcasting indicator of nominal GDP. The inclusion of the new aggregates yields substantially more accurate nowcasts of nominal GDP, illustrating the usefulness of the information contained in credit cards. [ABSTRACT FROM AUTHOR]

This article hypothesizes that firms demand more money to maintain low and stable inventory in order to fully exploit the globalization of supply chains. Three test implications derived from the hypothesis are verified with the US data: that the ratio of money held by firms over M1 trends up and becomes more volatile, that the ratio would plunge if there is a tremendous shock to supply chains, and that the ratio positively impacts real money balance in the long run cointegrated equilibrium with real income and short-term interest rate as control variables. Elevated money demand from the firm sector could partially explain the missing inflation in the 2010s. [ABSTRACT FROM AUTHOR]

Several policymakers and academic works have been discussing the nature of Central Bank Digital Currency (CBDC) as well as its debated relationship with crypto-assets. CBDC would allow the private (non-financial) sector to access the central bank’s reserves. Given its superior hierarchy in the money spectrum, CBDC adoption could trigger a strong or mild conversion from deposits, depending on its design, with strong impacts on the assets and liabilities composition and magnitude of different actors. The aim of this paper is to study the dynamics related to the transmigration process from deposits to CBDC as well as the process of money creation through a detailed step-by-step analysis, tracking the transactions between the institutions involved in its adoption. It underlines the validity of the endogenous money theory (EMT) in describing those transactions while clarifying the maintenance of the commercial banks’ vital role in the process of money creation, in a world with the emergence of CBDC. [ABSTRACT FROM AUTHOR]

One of the important factors of decision units and policymakers to develop successful policies is the correct estimation of macroeconomic variables for future periods. Inflation is among these macroeconomic indicators, and to realize successful policies, it is necessary to minimize the real effects and severity of inflation, determine future changes and their effects, and predict inflation reliably. Accurate forecasting of inflation is important both in terms of the policies to be implemented and the investment decisions to be taken by the public and private sectors. In this context, quarterly data were selected for Turkey using the 2008-2023 time period. In the study, machine learning methods were used instead of traditional econometric methods, in which the difference between prediction and reality was minimized. Brent oil, Rediscount advance interest rate, money supply, CPI, tax revenues, general budget revenues, policy rate, US Dollar/TL parity, and GDP attributes, which are thought to affect inflation, were selected by using random forest, decision tree and multi-layered detector, which is an artificial neural networks method, which are alternative machine learning methods. With the selected attributes, it is aimed to determine the method and influencer to make the correct estimation. The analysis results show that the decision tree model predicts the most accurate inflation rate compared to the random forest and multilayer sensor. Another finding from the study is that the highest determinant of inflation in Turkey is the US dollar. [ABSTRACT FROM AUTHOR]

It is difficult to predict index values or stock prices with a single financial formula. They are affected by many factors, such as political conditions, global economy, unexpected events, market anomalies, and the characteristics of the relevant companies, and many computer science techniques are being used to make more accurate predictions about them. This study aimed to predict the values of the XKAGT index by using the monthly closing values of the Borsa Istanbul (BIST) Forestry, Paper and Printing (XKAGT) index between 2002 and 2023, and the machine learning techniques artificial neural networks (ANN), random forest (RF), k-nearest neighbor (KNN), and gradient boosting machine (GBM). Furthermore, the performances of four machine learning techniques were compared. Factors affecting stock prices are generally classified as macroeconomic and microeconomic factors. As a result of examining the studies on determining the macroeconomic factors affecting the stock markets, 10 macroeconomic factors were determined as input. The macroeconomic variables used were crude oil price, exchange rate of USD/TRY, dollar index, BIST100 index, gold price, money supply (M2), S&P 500 index, US 10-year bond interest, export-import coverage rate in the forest products sector, and deposits interest rate. It was determined that all machine learning techniques used in the study performed successfully in predicting the index value, but the k-nearest neighbor algorithm showed the best performance with R2=0.996, RMSE=71.36, and a MAE of 40.8. Therefore, in line with the current variables, investors can make analyzes using any of the ANN, RF, KNN, and GBM techniques to predict the future index value, which will lead them to accurate results. [ABSTRACT FROM AUTHOR]

Economic downturns represent an inevitable challenge that nations and businesses must confront, presenting considerable risks. As a result, it becomes imperative for them to formulate strategies to secure their survival. The world has recently experienced an economic downturn due to a pandemic. COVID-19 has caused a significant economic crisis, leading to job losses and disruptions across various sectors worldwide, including the Philippines. The study utilizes economic indicators to determine patterns, meanings, and subsequent opportunities. Specifically, the study sought to identify relevant economic indicators, find patterns and meaning within each indicator and among indicators, and determine implications from findings. Content analysis was used in the study. It is a qualitative research method to identify and interpret themes, meanings, and patterns. The materials used include eleven Philippine economic indicators, namely, the Philippine Stock Exchange Composite Index, Balance of Trade, Core Inflation Rate, Consumer Spending, Tourist Arrivals, Consumer Confidence, Consumer Credit, Gold Reserves, Foreign Exchange Reserves, and Money Supply M2, and Interest Rate. In conclusion, the study determined that the collective surge in economic activities is positively related to the rise of inflation; increased interest rates potentially mitigated the rise in inflation, and other factors negated the trade deficits and gold reserve fluctuations. The Philippine economy is on the path to recovery, and the unique interrelations of economic indicators imply a more stable environment in the Philippine economy. This signals a green light for investors and an opportunity for policymakers to fine-tune existing initiatives to sustain economic recovery. [ABSTRACT FROM AUTHOR]

In this study using yearly data, it is examined if the effect of money supply (broad money) on inflation is asymmetric or not. 38 countries which have 5% and above inflation rate in average during the period of 1989-2018 are investigated through the panel data analyses. The study differs from other researches, which use monetary shocks in explaining the asymmetric relation, in which that it uses broad money change intervals along with control variables to see the asymmetric impact. Using broad money change intervals, it is concluded that the relation between broad money and inflation is explained better in the asymmetric pooled and fixed effect panel data models, compared to the symmetric models. According to the results, the effects of negative and positive changes in money supply on inflation are not symmetric. Moreover, as broad money increases, inflation goes up further. In the light of this information, it is possible to mention an asymmetric relation between broad money and inflation. [ABSTRACT FROM AUTHOR]

We study the role of markup dispersion and aggregate TFP for monetary transmission. Empirically, we show that the response of markup dispersion to monetary policy shocks can account for a significant fraction of the aggregate TFP response in the first two years after the shock. Analytically, we show that heterogeneous price rigidity can explain the response of markup dispersion if firms have a precautionary price-setting motive, which is present in common New Keynesian environments. We provide empirical evidence in support of this explanation. Finally, we study the mechanism and its implications in a quantitative model. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Economic Administrative & Legal Sciences is the property of Arab Journal of Sciences & Research Publishing (AJSRP) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper analyzes the response of cryptocurrency returns to the movement of economic policy uncertainty (EPU) and stock market volatility (VIX), as well as a few macroeconomic variables: gold price, interest rate, inflation rate, and oil price. Vector error correction model and regression model are applied to examine the linkage between these variables using data from 2015 to 2022. The analysis reveals that the selected variables have a positive and significant impact on cryptocurrency returns. This suggests that cryptocurrency can be considered a safe haven for investment. The paper also suggests a number of policies to ensure the protection of investment, control money supply and stock market instability, stabilize economic uncertainty, and systematize economic variables. This paper advocates a well-connected network and active participation of stakeholders such as government, central bank, security exchange, and financial institutions will help to streamline irrational movements and enhance the acceptability of cryptocurrencies through the framing and implementation of necessary regulations. [ABSTRACT FROM AUTHOR]

This paper analyzes the impact of "spirit of capitalism" on stationary welfare and stability properties of a one‐sector Ramsey economy, where the demand of money is motivated by a cash‐in‐advance constraint on consumption expenditures. Preferences are defined over consumption and capital stock. There is a monetary authority that follows either a money growth pegging rule or an interest rate pegging rule. When a money growth pegging rule is introduced, a unique steady state emerges. A slight desire for status is a sufficient condition for an increase in the money growth rate to exert a local stabilizing effect and to improve stationary welfare. When an interest rate pegging rule is introduced, two steady states may emerge: a "liquidity trap" and an "interior" steady state. Both steady states are locally determinate. Moreover, we show that a slight desire for status is also a sufficient condition to ensure that the stationary welfare at "interior" steady state is higher than the one of the "liquidity trap". It follows that an increase in the policy rate is, then, an efficient way to exit the "liquidity trap" steady state. Under similar conditions, a higher policy rate increases the stationary welfare at the "interior" steady state. [ABSTRACT FROM AUTHOR]

The scientific article is devoted to the study of the purpose of the monetary policy of the central banks of the EU member states and Great Britain, its instruments and legal acts, in which they are fixed. The legislation of the member countries of the European Union (Germany, France, Spain, Poland, the Czech Republic, Hungary) and Great Britain, modern approaches in the science of constitutional and administrative law regarding the definition of the goal of the monetary policy of the central banks of the member countries of the EU, and the range of its instruments are analyzed. Emphasis is placed on the fact that the purpose and functions of national banks are interrelated, but not identical. The concept of the goal of the monetary policy of the Central Banks of the EU member states, the activities and instruments of the monetary policy, the functions of the central bank of the EU member states are delineated. It is argued that reducing the purpose of the activities of the central banks of EU member states and Great Britain exclusively to the implementation of legal regulation of currency circulation in the state and that the main purpose of the central banks of such EU member states as the Czech Republic, Poland, and Hungary is purely to ensure the stability of the currency - is not justified. It is argued that the main joint functions of the central banks of Germany, France, Spain, Poland, the Czech Republic, Hungary and Great Britain are to ensure the stability of the monetary unit, to promote the maintenance of sustainable rates of economic growth, to achieve and maintain price stability in the state, and to support economic policy. It is established that the goal of the monetary policy of the central banks of the EU member states is to ensure price stability, and it is additionally substantiated that the inflationary inclination of the financial policy is the most effective. It was established that the accounting policy, the interest rate policy, and the regulation of mandatory reserve norms, the volume of the money supply, operations on the open market and operations with credit resources, the amount of interest rates, interest rates of the mandatory reserve of banks are not the purpose of monetary and credit policies, instruments of monetary policy of the central banks of EU member states and Great Britain. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to assess the possibility of asymmetric impact of monetary policy on housing permits issued in each state of the USA. Design/methodology/approach: The methodology and approach are based on the linear ARDL and nonlinear ARDL approach to error-correction modeling and asymmetric cointegration. Findings: The linear models predict that money supply impact housing permits in 28 states in the short run and only nine states in the long run. However, the asymmetric effects are far more pervasive, highlighting the restrictive nature of the linear model. The results from the nonlinear model show at least one lag of positive and/or negative changes in money supply significantly impacts housing permits in nearly all states. Even in the long run, housing permits in 32 states share a long-run relationship with positive and/or negative changes in money supply. The authors also find contractionary monetary policy has a greater influence on housing permits in most states compared to expansionary policy. Originality/value: For the first time, the authors use state-level data and asymmetric approach to assess the impact of monetary policy on house permits issued in each state of the USA. [ABSTRACT FROM AUTHOR]

Copyright of Investigación Económica is the property of Universidad Nacional Autonoma de Mexico, Facultad de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper aims to theoretically investigate how the presence of heterogeneous consumption behaviors, namely hand-to-mouth (HtM) and habit formation (HF), affects the monetary policy effectiveness and empirically explore the responses of three Association of Southeast Asian Nations (ASEAN) economies to external shocks. We employ the Bayesian methodology to undertake the Dynamic Stochastic General Equilibrium (DSGE) estimation using quarterly data. Empirical results indicate a HtM parameter of 22% in Indonesia, 34% in the Philippines, and 27% in Thailand, with the HF parameter estimated at around 50%. Given the estimated parameters, a monetary shock would have standard effects on macroeconomic variables. Besides, incorporating HtM consumers into a standard DSGE model amplifies the adverse effects of monetary shock on aggregate consumption/output growth. Also, a higher ratio of HtM consumers exacerbates the negative effects of monetary shock, but it does not influence much the adverse impacts of demand and supply shocks on macroeconomic variables. [ABSTRACT FROM AUTHOR]

This study investigates the factors influencing food inflation in Turkey, employing both endogenous and exogenous models and integrating major literature findings. Utilizing monthly data from February 2007 to November 2023, standardized for analysis, it explores the relationship between food inflation and various determinants through classical and Bayesian methods. The analysis reveals that increases in the real effective exchange rate, money supply (M1), Turkish and Federal Reserve interest rates, and the food and beverage price index contribute to rising food inflation. Conversely, higher oil prices have a statistically significant negative effect on food inflation. The most influential variables, determined by their inclusion probabilities in the model, are the money supply, Federal Reserve interest rate, real effective exchange rate, and Turkish interest rate. These findings underscore their importance in understanding and analyzing changes in Turkey's food inflation.

This paper focuses on the examination of the long-run relationship between money supply and selected national and global stock indices. Detailed knowledge of this relationship can be used by analysts, investors and monetary policy makers. Analysis of the relationship was performed using a 2-stage Engle-Granger cointegration. First, the stationarity of the time series was tested, then both the long-term OLS model and the short-term EC model were estimated. Time series were always tested on the longest period for which data were available. The longterm dependence of stock indices on the respective M2 was confirmed for the BOVESPA, FTSE100, S&P/BMV IPC, S&P BSE500, TSX and The 5000 Wilshire Small Cap Price Return indices. In contrast, the dependence between world money supply indicator GlobalM2, the stock index FTSEALL World, and the S&P500 index was not demonstrated. Additionally, no dependence was identified between the respective M2 and the DAX, PX, Nikkei225, KOSPI, SMI, SPCITIC300, Eurostoxx50, Willshire5000PR and ATX indices. Backward dependence of M2 on the stock index was found only for the Chinese SPCITIC300 index.

This study aims to determine the money supply, interest rates and exchange rates against inflation. This research data uses secondary data with the time series method obtained from the North Maluku Bank Indonesia (BI) and North Maluku Central Statistics Agency (BPS) from 2010-2020. The method used in this research is multiple linear regression. Based on the results of the study showed that the simultaneous testing showed that of the three variables, there was no effect. Based on the above findings that inflation is mostly influenced by interest rates, if interest rates rise it will increase inflation. Because interest rates have the most dominant contribution in increasing inflation, therefore the monetary authority must try to maintain interest rates for inflation stability.

This study examines the impact of inflation and money supply on dollarization. Especially in recent years, the rapid rise of the exchange rate and inflation in Türkiye has put the phenomenon of dollarization back on the agenda. The study covers the period 2012Q4-2023Q4. The study first applies the Fourier ADL cointegration test, which allows for soft breaks. As a result of the test, it was found that the variables have a long run relationship. In the short run, only budget revenue has a positive effect on dollarization. In the long run, the exchange rate, exports, money supply, and deposit rates have a positive effect, while inflation has a negative effect. The study also applied the Fourier-Toda-Yamamoto causality test. As a result of the test, bidirectional causality was found between exchange rate, inflation and money supply variables and dollarization. The striking result of the study is that inflation has a negative impact on dollarization. This result, which is consistent with some studies in the literature, is attributed to the money supply. Although the demand for foreign exchange increases because the money supply is higher than inflation, the dollarization index decreases. This explanation can explain the negative relationship.

This study employs the estimation of aggregate import demand under foreign exchange constraints in Ethiopia, utilizing annual time series data from 1985 to 2021. The regression analysis is conducted using the nonlinear autoregressive distributed lag (NARDL) approach to investigate the impact of the accumulation of foreign exchange reserves on aggregate import demand in Ethiopia. The estimation results indicate that, in the long run, all the variables, i.e., foreign exchange reserve, the relative price of imports, real income, volatility of the exchange rate, money supply, and policy dummy, significantly determine the behavior of aggregate imports over the reference period. The findings also show that, in the long run, foreign exchange reserve, real income, and the exchange rate positively affect the demand for imports in Ethiopia. Meanwhile, a positive shock in relative import price and money supply negatively affects import demand in Ethiopia. Thus, the price and income elasticity estimates have correct signs and are statistically significant. The variables included in the model strongly affect import demand in both the short and long run. Finally, policymakers aiming to significantly influence import demand should focus on effective management of these variables, as they strongly affect import volume. [ABSTRACT FROM AUTHOR]

This study aims to examine the budget deficit–inflation relationship, considering financial sector development and broad money supply as moderating and mediating variables. For this purpose, a panel data set ranging from polled mean group, mean group, and dynamic fixed effect estimation techniques are employed. Hence, the pooled mean group estimation result reveals that the budget deficit is inflationary. In addition, GDP per capita, the effective exchange rate, financial sector development, regulatory quality, and the interaction term of the budget deficit and financial sector development are significant determinants of inflation. The study further examines the role of the broad money supply as a mediating variable in the budget deficit–inflation relationship. The structural equation model results and the mediation effect tests confirmed a partial mediation effect of the broad money supply on the budget deficit–inflation relationship. Based on the findings, it is recommended to strengthen regulatory quality, reduce broad money supply, and improve financial sector development. By doing so, we can create a more stable and efficient economy that benefits everyone in the long run. [ABSTRACT FROM AUTHOR]

• We study the effectiveness of helicopter money in the form of a central bank digital currency (CBDC) • We compare traditional fiscal and monetary stimulus, quantitative easing, and the issuance of a CBDC credited to households or firms, by means of a stock-flow consistent model of a growing open economy. • Issuing a CBDC by expanding the central bank's balance sheet can have a durable impact on GDP and it allows for the activation of a new transmission channel. • A CBDC might reduce the demand for bank deposits and, even more crucially, for bank loans, thus creating challenges for financial stability. We study the effectiveness of helicopter money, once a thought experiment that is now a feasible option given new digital technologies. We consider the effects of central bank digital currencies (CBDC) from a theoretical point of view, by means of a stock-flow consistent model of a growing open economy. We compare the effectiveness of this tool with that of traditional fiscal and monetary policies. We find that issuing a CBDC by expanding the central bank's balance sheet can have a durable impact on GDP and crucially, it allows for the activation of a new transmission channel, which depends on the sensitivity of investment and of the interest rate to firms' leverage. But it might reduce the demand for bank deposits, and even more crucially for bank loans, thus creating challenges for financial stability. [ABSTRACT FROM AUTHOR]

The establishment of the Federal Reserve System (FRS) in 1913 marked a pivotal moment in ensuring financial stability. This article scrutinizes the structure, trajectory, and evolution of monetary policy since the inception of the Fed. With shifting trends and the achievement of a low inflation environment coupled with the lower bound challenge, maintaining a dual mandate and the autonomy of the Fed raises questions about the efficacy of current monetary policies. The authors analyze the effectiveness of implemented policies and propose an alternative approach to monetary policy implementation, advocating for mechanisms beyond quantitative easing and forward guidance. They suggest leveraging macroprudential policies and preemptive strategies, such as introducing safeguards and simultaneously setting a diverse range of federal fund rates to address specific market segments in alignment with the Fed's objectives. [ABSTRACT FROM AUTHOR]

In 2020, the world experienced several significant events, including the coronavirus (COVID-19) pandemic and the collapse of international crude oil prices. The rapid spread of this pandemic has dramatic impacts on financial markets all over the world, thereby increasing market risk aversion in an unprecedented way since the subprime financial crisis. The decline in stock markets implied volatilities of equity and oil prices, thereby heightening turmoil in global financial markets despite comprehensive and substantial financial reforms. To this end, we investigated the likely effects of this pandemic on the Saudi stock market while controlling for oil prices based on daily data for a period from 1/1/2020 to 19/9/2022. To ascertain the existence of a long-run equilibrium relationship between the variables, we applied autoregressive distributed lag (ARDL) modeling and the error correction model, with this ultimately revealing the existence of strong cointegration in the long run. The ARDL bounds test was found to be robust by combined cointegration tests, thus providing further evidence of a strong relationship in the long run. Granger causality tests also yielded evidence of causality between the variables in both directions. The total COVID-19 confirmed cases and oil prices also caused movements in stock returns in the short run. Our findings have some prominent implications for asset managers and policymakers to improve stock market efficiency and boost global economic activity. Saudi authorities can consequently remove the regulatory and legal obstacles to develop their stock market and better improve the risk management, which will allow to make quick decisions in response to any oil price volatilities. Policymakers should also adopt proactive strategies that can comfort stock investors' anxieties over the increasing oil price volatilities. Finally, the findings should be treated with some cautions because of the limited sample size and the tests' statistical inference. Nevertheless, they do open opportunities for further studies to look in more detail at how the COVID-19 pandemic affected, over the short and long run, monetary and fiscal policy coordination, financial stability, and various other macroeconomic indicators in Saudi Arabia. [ABSTRACT FROM AUTHOR]

Copyright of Jurnal Ilmu Ekonomi Terapan is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Journal of Economics & Administrative Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We investigate the welfare cost of anticipated inflation, when the volume of credit card transactions is included in measured monetary service flows. We use the credit-card-augmented Divisia monetary aggregates in a nonlinear dynamic stochastic general equilibrium (DSGE) New Keynesian model and calculate the welfare costs of inflation. The welfare costs of inflation with credit card services included are greater than without them in the New Keynesian DSGE model. Because of the complexity of the model's dynamical structure, we are not aware of a simple explanation for the increased welfare sensitivity to inflation. [ABSTRACT FROM AUTHOR]

The rapid economic developments and successive crises prompted many researchers to search for ways to confront the obstacles facing investment in the financial markets, with the aim of mitigating the impact of economic variables on investment in them. Hence, this study deals with the impact of inflation on financial markets, by studying the impact of inflation on returns Stocks Because stocks are a good hedge against inflation risks, they also provide an important indicator to contribute to making decisions about the optimal diversification of assets. According to results of the analysis, the research concluded that the Inflation rate (M-OM) significant with (RDWX) (0.05) which is equal the significance level of (0.05), since that the correlation coefficient (r) was positive and weak with RDWX (0.212), according to this result we can say that there is a positive and weak relation between Inflation rate (M-O-M) and Stock market return at DSE. [ABSTRACT FROM AUTHOR]

This article explores the concept of a universal currency, drawing parallels to the Roman Empire's banking system and its use of promissory notes. It discusses the collapse of the Roman imperial currency due to hyperinflation and political turmoil, comparing it to the challenges faced by Britain in the seventeenth and eighteenth centuries. The article highlights the fluctuating exchange rates and poor quality of coins in circulation during this time, contrasting it with the Roman Empire's successful management of its currency. It concludes by acknowledging the evolution of currency systems and the increasing reliance on digital transactions in the modern world. [Extracted from the article]

Economists have repeatedly developed various theories for the origin of inflation and claimed that these theories were always valid everywhere. But history has shown that the theories – although they are useful – were only valid during certain time periods and under special circumstances. What is therefore needed is a system that assigns the various explanations of inflation to the specific circumstances for which they are particularly suited. This paper sets out such a system. Borrowing from Charlie Munger's (2005. Poor Charlie's Almanack. Stripe Press), I call it a "latticework of inflation models". In the first section 1 map the various inflation theories and then discuss and relate them to each other in the following sections. I find that during and after the pandemic several drivers of inflation were at work, so that several theories of inflation instead of just one allow a more comprehensive explanation of the inflation experienced during this period. The "latticework of inflation models" is also better suited than just one model for investigating the outlook for inflation. [ABSTRACT FROM AUTHOR]

Milton Friedman and David Meiselman's 1963 article, "The Relative Stability of Monetary Velocity and the Investment Multiplier in the United States, 1897–1958," was one of the most influential studies to come out of the Keynesian-monetarist debates of the 1960s and 1970s. The gestation of the article, however, is shrouded with considerable inaccuracy and ambiguity. I use archival materials to provide a more accurate chronological ordering of the gestation of the article than has hitherto been available. I show that the gestation was subject to considerable delays. I provide reasons that explain why a long-promised follow-up paper was never completed and why a book sequel to Friedman's 1956 Studies in the Quantity Theory of Money , planned as a co-edited work shortly after the appearance of the Friedman and Meiselman 1963 article, was not published until 1970 and was edited by Meiselman alone. [ABSTRACT FROM AUTHOR]

The study investigates the external influences on Korea’s monetary policy over the period from 1990 to 2020. The focus is on the effects of US interest rates, payments imbalances and exchange rate changes on Korean monetary policy. The estimation of the Taylor rule measures the effects on Korean interest rates and the estimation of sterilization/ offset coefficients measures the effects on the domestic money supply and monetary base. This study measures the sterilization/offset equations and compares the results with the ones from Koo (2004) which examines the Taylor rule study. The empirical tests of both studies reveal two key findings: (1) Korean monetary policy has been influenced by monetary developments in the US, but it still has had a good deal of independence. (2) The exchange rate plays a crucial role for the BOK in achieving independent monetary policy. [ABSTRACT FROM AUTHOR]

The object of the study is monetary processes and the real sector of the economy. The purpose of the study is to analyze the impact of monetary processes in the economy on GDP based on a systematic approach. The task of analyzing the relationship between the main indicators of monetary processes and GDP on the basis of a wide sample of countries was solved. The results are obtained: – for the variables included in the cluster analysis, the money supply analyzed: (1st cluster “stable financial environment” – 0, 2nd cluster “high access to credit” – 147.7, 3rd cluster “limited access to credit” – 72.2, 4th cluster “high interest rates” – 30.4 % of GDP); – 72 countries are divided into 4 clusters, with 13 countries in the first cluster, 15 in the second, 21 in the third, and 23 in the fourth. This allows to determine the nature and place of the economy in the world and to make monetary policy decisions; – there is a positive correlation between GDP and money supply (r=0.317); there is a weak positive relationship between GDP and the credit information depth index (r=0.203); there is a moderate positive relationship between GDP and domestic lending (r=0.39). Money supply management and domestic credit should be prioritized in monetary management of the economy. The obtained results are explained by the assumption of linear dependence between the indicators of monetary processes and the real sector of the economy. This assumption was confirmed on the example of different countries, which indicates its universality. The peculiarities of the results obtained are the application of a combination of cluster and correlation and regression methods of analysis using actual World Bank data [ABSTRACT FROM AUTHOR]

In order to compare the effectiveness of China's price- and quantity-based monetary policy tools over time, we develop a structural vector autoregressive model with time-varying parameter and factor augmentation (TVP-FA-S-VAR model) to analyze the response of output gap to monetary policy shocks. We find that price-based regulation becomes increasingly effective as China's interest rate liberalization proceeds, while the effects of broad money supply on output have been diminishing. Additionally, as it becomes harder to measure the effectiveness of quantity-based regulation, China's central bank has been more prudent to rely on quantitative intermediaries. Moreover, as much as 40% residual information of the Taylor rule will be omitted using price-based intermediaries, while factor augmentation fails to increase the explanatory power of quantitative intermediaries significantly. The correlation between quantitative intermediaries and the real economy has been weakening, so that the quantity-based monetary policy tools are no longer suitable for government intervention in China. We develop a structural vector autoregressive model with time-varying parameter and factor augmentation (TVP-FA-S-VAR model) to analyze the response of output gap to monetary policy shocks. We find that price-based regulation becomes increasingly effective as China's interest rate liberalization proceeds, while the effects of broad money supply on output have been diminishing. China's central bank has been more prudent to rely on quantitative intermediaries. As much as 40% residual information of the Taylor rule will be omitted using price-based intermediaries, while factor augmentation fails to increase the explanatory power of quantitative intermediaries significantly. The correlation between quantitative intermediaries and the real economy has been weakening, so that the quantity-based monetary policy tools are no longer suitable for government intervention in China. [ABSTRACT FROM AUTHOR]

Domestic and international risk shocks have greatly increased the demand for systemic risk management in China. This paper estimates China's multi-layer financial network based on multiple financial relationships among banks, assets, and firms, using China's banking system data in 2021. An improved PageRank algorithm is proposed to identify systemically important banks and other economic sectors, and a stress test is conducted. This study finds that China's multi-layer financial network is sparse, and the distribution of transactions across financial markets is uneven. Regulatory authorities should support economic recovery and adjust the money supply, while banks should differentiate competition and manage risks better. Based on the PageRank index, this paper assesses the systemic importance of large commercial banks from the perspective of network structure, emphasizing the role of banks' transaction behavior and market participation. Different industries and asset classes are also assessed, suggesting that increased attention should be paid to industry risks and regulatory oversight of bank investments. Finally, stress tests confirm that the improved PageRank algorithm is applicable within the multi-layer financial network, reinforcing the need for prudential supervision of the banking system and revealing that the degree of transaction concentration will affect the systemic importance of financial institutions. [ABSTRACT FROM AUTHOR]

We analyze various determinants of the average price level using a strictly mathematical approach. Starting with the microeconomic perspective, we review the effect of demand shifters such as consumer income and the level of advertising on the average price level in a simple partial market equilibrium model. Then, we discuss the effect of supply shifters such as the exogenous tax level, worker wage, rental rate, and technology. We use implicit differentiation and Jacobian determinants. While government spending triggers inflation, taxes have the opposite effect. This is consistent with Keynesian theory. Money supply increases national income and prices while reducing the equilibrium interest rate. Therefore, money supply has pro-inflationary effects. The effect of money demand is the opposite—it increases the equilibrium interest rate, thereby lowering national income and prices. Augmenting the model to the level of international trade, we find that exports raise national income, the interest rate, and the average price level, while the effect of imports is just the opposite. Government spending raises the exchange rate while continuous inflation lowers it. [ABSTRACT FROM AUTHOR]

This study analyzed the response of Foreign Direct Investment (FDI) due to the shock on financial development in Indonesia from January 2010 to December 2022. The variables used in this research are FDI and financial development, which measure financial development using traditional measurements such as the Amount of Money in Supply, Credit, and Market Capitalization. Interest Rate and Trade Openness Variables were used as control variables. The study used the VECM method. Results show that in response of the shock on financial development on FDI, Money Supply is positive, Credit negative, and Market Capitalization negative. [ABSTRACT FROM AUTHOR]

The recent prevalence of digital currencies has challenged policymakers as they try to control the supply of money and rein in clandestine activities. Corruption and shadow economy are widely prevalent illegal/unobserved activities that have been hard to eliminate worldwide. These longstanding and entrenched activities have possibly found a new avenue to thrive and evade detection/punishment. So disentangling the nexus between corruption, shadow economy, and digital currencies is important. Using recent cross‐country data, this paper analyzes the interrelationships between corruption, shadow economy, and cryptocurrencies. We argue that a large underground sector in a nation provides a mechanism through which corrupt government officials use cryptocurrencies to conceal their unauthorized earnings. Employing formal mediation analysis, our results show that the positive nexus between corruption and cryptocurrency adoption is mediated by the shadow sector. Quantitatively speaking, three‐fourths of the correlation between corruption and cryptocurrency usage is mediated by the shadow economy. The primary implication of our findings is that effective monitoring of cryptocurrencies should pay attention to policies to control both corruption and the shadow economy. [ABSTRACT FROM AUTHOR]