Search results for "Monetary base"
showing 5 items of 5 documents
Virtual Currency: New Step in Monetary Development
2016
Abstract Money is perhaps the best recognized and at the same time less understood figure of economy. During the evolution of a monetary science starting from the eighteenth century and fundamental works on such questions as true nature and main functions of money, the approach and theories about monetary science have changed significantly up to date not reaching the final state. The twenty-first century can be characterized with a vast development of technologies and the increase use of the internet which significantly succeeded the development of monetary system introducing a new phenomenon - virtual currencies. While remaining rather illusive, virtual currencies have been broadly noted b…
The Economics of Monetary Union: The Theory of Optimum Currency Areas
2013
In the 1960s, the theory of Optimum Currency Areas (OCAs) emerged as a by-product of the theoretical debate between fixed and flexible exchange rates. The OCAs approach singles out an economic characteristic to define an economic domain where there is exchange rate fixity erga intra, while there is exchange rate flexibility erga extra. In an optimum currency area, exchange rates fixity prevails internally without any type of internal or external disequilibrium. Each single characteristic ensures that floating or regular adjustments in nominal exchange rates are neither necessary, efficient nor desirable for stabilisation purposes. The literature proposes several economic criteria: factor mo…
The Interplay between Money Market Development and Changes in Monetary Policy Operations in Small European Countries, 1980-2000
2006
We study the interplay between money market development and changes in monetary policy operating procedures in 11 European countries from c. 1980 up to the launch of the EMU. Aspects of money market development such as size and structure of different market segments, and institutional and regulatory changes, are addressed. We recount and empirically examine the reorientation of monetary policy instruments away from quantitative direct control instruments towards indirect market-based instruments.The process of deregulation is uniform across countries. The path of money market development varies substantially, whereas changes in central bank instruments show both similarities and differences…
Rethinking Monetary Policy with Reference to Monetary Circuit Theory
2011
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 th…
Monetary Policy from a Circuitist Perspective
2007
As Arestis says, circuit theory is ‘a strong component of the endogenous money thesis’ (1996: 113). This notably means that circuitists endorse the original Post Keynesian dismissal of the orthodox Monetarist approach to monetary policy by which the quantity of money in the economy should be regulated so as to stifle inflationary pressures. From the endogenous view, money creation is, in Moore’s words (1988), ‘credit-driven’, meaning that money is demanded by the general public and firms to finance spending which is dependent upon prices and money wages. Hence it is prices and money wages that are factors determining the amount of money created and not the contrary. This led Post Keynesian …