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1

Gardner, Grant W. "Currency substitution, money growth rules, and the interdependence of monetary policy." Journal of Economics and Business 38, no. 2 (May 1986): 165–72. http://dx.doi.org/10.1016/0148-6195(86)90026-3.

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2

Adi, Agya Atabani, and Joshua Sunday Riti. "Determination of Long and Short Run Demand for Money in the West African Monetary Zone (WAMZ) Countries: A Panel Analysis." Econometric Research in Finance 2, no. 2 (January 5, 2018): 79–97. http://dx.doi.org/10.33119/erfin.2017.2.2.2.

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The paper examines demand for real money balances in six West Africa countries, over the 1985-2014 periods using panel Cointegration technique. The result shows that long run money demand is positively related to real income, inflation rate and inversely related to interest rate spread, real effective exchange rate and US real interest rate. Long run income elasticity is greater than unity and less than unity in short run. All variables are significant except effective exchange rate, thus; both currency substitution and capital mobility hypotheses hold in the long run while capital mobility holds only in the short run. We recommend that monetary aggregate should growth slower than economic growth to maintain price stability, countries should try to maintained stable exchange rate and ensured market driven interest rate policy. Keyword: Demand for Money; Interest Rate Spread; Capital Mobility and Currency Substitution, Panel Analysis.JEL CODE: E41, E52, C33, O11.
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3

Viñuela, Carlos, Juan Sapena, and Gonzalo Wandosell. "The Future of Money and the Central Bank Digital Currency Dilemma." Sustainability 12, no. 22 (November 20, 2020): 9697. http://dx.doi.org/10.3390/su12229697.

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In this paper we set out a three-pillar monetary-financial framework to (i) analyze, categorize and compare past, current and emerging means of payment; to (ii) capture their creation and destruction processes through sectoral balance sheet dynamics; and to (iii) identify the inherent risks to the current monetary-financial system, also known as the fractional reserve banking system. These risks, which stem from sudden shifts in money demand and supply, are as follows: (I) risk of a cashless society; (II) risk of structural bank disintermediation; (III) risk of systemic bank runs; (IV) risk of currency substitution; and (V) risk of economic and financial bubbles. This framework will guide the assessment of the central bank digital currencies (CBDC), which are considered as the next step in monetary evolution. We will analyze two large groups of CBDC proposals: (i) proposals aimed at complementing cash and bank deposits; and (ii) proposals aimed at replacing all bank deposits with CBDCs. We find that once CBDCs are issued in both sets of proposals, there is always a trade-off between low levels of (I), (IV), (V), risks and high levels of (II) risk. This trade-off could also be defined as the CBDC dilemma, which states that in most CBDC proposals it is impossible to have both of the following at the same time: (1) low levels of (I), (IV) and (V) risks; and (2) low levels of (II) risk. Finally, we suggest that further research on CBDCs should focus on the second group of proposals on a phase-in basis in order to also mitigate the structural bank disintermediation risk and hence to overcome the CBDC dilemma.
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4

Gadea, María Dolores, Marcela Sabaté, and Isabel Sanz. "Long-run fiscal dominance in Argentina, 1875–1990." Financial History Review 19, no. 3 (September 13, 2012): 311–35. http://dx.doi.org/10.1017/s0968565012000157.

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For most of the twentieth century, Argentina solved the macroeconomic policy trilemma through domestic monetary sovereignty. This article illustrates how the need to finance deficits was behind Argentine sovereignty. We test the hypothesis of fiscal dominance between 1875 and the approval of the Austral Plan in 1991 and find that deficits drove money creation in the long run. The article also reveals how fiscal dominance, in a scenario of increasing currency substitution, helps to explain the dynamics of Argentine inflation in the second half of the twentieth century.
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5

Rumyantseva, E. E. "The Russian industry: the problems and the further development." Economy in the industry 11, no. 2 (September 1, 2018): 151–58. http://dx.doi.org/10.17073/2072-1633-2018-2-151-158.

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This article describes the various approaches to the analysis of the current situation and the justification of the further development prospects of the Russian industry represented at the round table on June 21,2018 inthe State Duma of Federal Assembly of the Russian Federation on a subject: «Legislative providing industrial policy of the Russian Federation: technologies, innovations, investments». Attention had also been drawn to issues requiring the globalization, the industrial development inequality of the countries of the world and the Russian regions, the dependences of economic growth on the state of the knowledge economy, the industrial and monetary and credit policy interrelations, the changes in the system of the state regulation of the Russian industry, the business moods, the technological updating results of the industrial enterprises, the features of the investment projects financing in Russia and in industrialized countries, the prospects of the introduction in Russia of the digital technologies of the industrial production management. Among offers of the situation significant improvement there are: the providing for the economic relations participants of the equal competitive opportunities; the completion of the Federal law «About Industrial Policy in the Russian Federation», the involvement in the economy of free money, the updating on the basis of the problems settlement with the financing of the enterprises of the fixed assets, the selective development of the import substitution, the distribution of the positive experience of the successful industrial companies. The author points to a need of the involvement in the discussion and the other important questions concerning the comprehensive analysis of the reasons of the serious lag of the Russian enterprises from the enterprises of the industrialized countries generating the negative consequences; the labor productivity at the industrial enterprises of the different countries of the world and factors of its growth; the influences of the developed bureaucracy, the administrative barriers, the corruption on a situation in the various industries, the applications of the concept of the economical production, the energy productivity and a resource conservation, etc.
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6

Rumyantseva, E. E. "The Russian industry: the problems and the further development (ending)." Russian Journal of Industrial Economics 11, no. 3 (November 5, 2018): 226–34. http://dx.doi.org/10.17073/2072-1633-2018-3-226-234.

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This article describes the various approaches to the analysis of the current situation and the justification of the further development prospects of the Russian industry represented at the round table on June 21,2018 inthe State Duma of Federal Assembly of the Russian Federation on a subject: «Legislative providing industrial policy of the Russian Federation: technologies, innovations, investments». Attention had also been drawn to issues requiring the globalization, the industrial development inequality of the countries of the world and the Russian regions, the dependences of economic growth on the state of the knowledge economy, the industrial and monetary and credit policy interrelations, the changes in the system of the state regulation of the Russian industry, the business moods, the technological updating results of the industrial enterprises, the features of the investment projects financing in Russia and in industrialized countries, the prospects of the introduction in Russia of the digital technologies of the industrial production management. Among offers of the situation significant improvement there are: the providing for the economic relations participants of the equal competitive opportunities; the completion of the Federal law «About Industrial Policy in the Russian Federation», the involvement in the economy of free money, the updating on the basis of the problems settlement with the financing of the enterprises of the fixed assets, the selective development of the import substitution, the distribution of the positive experience of the successful industrial companies. The author points to a need of the involvement in the discussion and the other important questions concerning the comprehensive analysis of the reasons of the serious lag of the Russian enterprises from the enterprises of the industrialized countries generating the negative consequences; the labor productivity at the industrial enterprises of the different countries of the world and factors of its growth; the influences of the developed bureaucracy, the administrative barriers, the corruption on a situation in the various industries, the applications of the concept of the economical production, the energy productivity and a resource conservation, etc.
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7

ZERVOYIANNI, ATHMA. "EXCHANGE RATE OVERSHOOTING, CURRENCY SUBSTITUTION AND MONETARY POLICY." Manchester School 56, no. 3 (September 1988): 247–67. http://dx.doi.org/10.1111/j.1467-9957.1988.tb01331.x.

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8

Kumamoto, Hisao, and Masao Kumamoto. "Currency Substitution and Monetary Policy Effects: The Case of Latin American Countries." International Journal of Economics and Finance 9, no. 2 (January 11, 2017): 32. http://dx.doi.org/10.5539/ijef.v9n2p32.

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In this study, we empirically investigate how currency substitution transmits foreign monetary policy shocks to domestic countries and evaluate how the central bank respond to real exchange rate movements in three inflation-targeting Latin American countries under currency substitution, namely Chile, Mexico and Peru, between 2000 and 2011. Our model is based on a small open economy dynamic stochastic general equilibrium model that incorporates currency substitution and incomplete financial markets, and we estimate it by using Bayesian estimation techniques. Our empirical results are as follows. First, the degree of currency substitution is higher in Mexico, while it is negligible in Chile and Peru, which reflects the slight differences in the parameter values capturing the preference for the domestic currency among these countries. Second, the estimated coefficients of the real exchange rate gap in the monetary policy rule are high, meaning that the central banks in these countries actively respond to real exchange rate movements to diminish real exchange rate volatility. Third, domestic monetary policy influences the domestic economy through the real interest rate channel. On the contrary, foreign monetary policy has a significant effect in Mexico, while it is insignificant in Chile and Peru. This finding suggests the potential instability of currency substitution in that slight changes in the parameter values capturing the preference for the domestic currency alter the degree of insulation from foreign monetary policy shocks.
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9

Zou, Lixing. "Digital Currencies and Relevant Policy Analysis." Research in Economics and Management 6, no. 3 (July 22, 2021): p1. http://dx.doi.org/10.22158/rem.v6n3p1.

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The paper collates the relations of digital currencies with the past forms of currencies, studies the operating mechanism of digital currencies, analyzes the influence of digital currencies on the financial order and economic pattern, and probes into how to drive the reform of global monetary system with pragmatic and innovative efforts. The paper highlights: First, the evolution and development of currency reflects the mankind’s social and economic development level. Second, digital currency born with the advances of technology does not change the content of credit money. The credit money-to-digital currency shift must respect the operating mechanism of money and ensure that the physical market and the money market are balanced or roughly balanced. Third, with a complicated influence on the social economy, digital currency is unlikely to change the global monetary system and the international economic pattern easily. Fourth, the work of encouraging financial innovation and improving overall financial infrastructure should come with strengthened efforts to develop sound rules governing the market order in the context of digital economy, by guarding against the risks from “excessive monopoly” and “decentralization”. Fifth, the paper calls for linking “trust, confidence and credit” of the human society organically with such intrinsic values as global development, global planning and global resources, and also leveraging such values to actively approach the “Earth-based” monetary system and its replacement of the “gold standard”, the “silver standard” and the sovereign credit based monetary system which have been in long use.
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10

LYUBICH, Oleksandr, and Gennadiy BORTNIKOV. "Digital currency of central banks and monetary policy." Fìnansi Ukraïni 2020, no. 10 (December 24, 2020): 64–80. http://dx.doi.org/10.33763/finukr2020.10.064.

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The purpose of the study is to determine the potential impact of the introduction of central bank digital currencies (CBDC) on monetary policy. In this paper , we would like to focus on two aspects: the need to save cash in circulation and the potential danger of private digital money for monetary policy. Central bank researchers and independent experts are paying much attention to the CBDC . The reasons are such preconditions as innovations in payment instruments, blockchains, cryptography, globalization in response to the growth of demand for transactions using digital currencies with expected increase in their impact on monetary stability. One of the potential threats to an effective monetary policy is the emergence of private digital money and the risk of failing to choose the right CBDC business model. The development of private digital currencies can significantly reduce income of central banks from seigniorage, weaken the influence of central banks on financial stability and sustainability of monetary policy. Cashless payments, unlike cash, store information about the sender and the recipient, size, date and destination. This information is already a commodity that sellers of financial products and suppliers of goods and services from the real sector are willing to pay for. Cash allows to make payments with greater benefits for the population, taking into account the reliability, comfort and confidentiality. In our opinion, ‘social distancing’ encourages contacts between people through the media channels, with dissemination of knowledge among the general public about digitalisation and convince indiviuals to agree on disclosure of personal data. Central banks are called upon to further develop the money supply management mechanism, to ensure the coexistence of non-cash and cash in their jurisdictions.
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11

Economou, Emmanouil-Marios L., Nicholas C. Kyriazis, and Nikolaos A. Kyriazis. "Money Decentralization under Direct Democracy Procedures. The Case of Classical Athens." Journal of Risk and Financial Management 14, no. 1 (January 11, 2021): 30. http://dx.doi.org/10.3390/jrfm14010030.

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By analyzing the case of Athens during the Classical period (508-323 BCE) the main thesis of this paper is that under direct democracy procedures and the related institutional setup, a monetary system without a Central Bank may function relatively well. We focus on the following issues: (i) Τhe procedures of currency issuing in the Athenian city-state, (ii) why the Athenian drachma become the leading international currency in the Mediterranean world (iii) how and towards which targets monetary policy without a Central Bank was possible (iv) defining the targets of monetary policy and the mechanisms for its implementation (v) the role of money in the economy (vi) the issue of deficit spending (vii) the reasons of the replacement of the Athenian drachma as a leading currency by others from the Hellenistic period onwards (viii) the correlation of our findings regarding the decentralized character of monetary policy in Classical Athens to today’s realities, such as the issue of cryptocurrencies. Our analysis shows that monetary policy without a Central Bank was possible, with its foremost aim being the stability of the currency (mainly, silver coins) in order to enhance trust in it and so, make it an international currency which could outcompete other currencies. Since there was no Central Bank like today, monetary policy decisions were taken by the popular assembly of citizens in combination with the market forces themselves.
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12

Economou, Emmanouil-Marios L., Nicholas C. Kyriazis, and Nikolaos A. Kyriazis. "Money Decentralization under Direct Democracy Procedures. The Case of Classical Athens." Journal of Risk and Financial Management 14, no. 1 (January 11, 2021): 30. http://dx.doi.org/10.3390/jrfm14010030.

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By analyzing the case of Athens during the Classical period (508-323 BCE) the main thesis of this paper is that under direct democracy procedures and the related institutional setup, a monetary system without a Central Bank may function relatively well. We focus on the following issues: (i) Τhe procedures of currency issuing in the Athenian city-state, (ii) why the Athenian drachma become the leading international currency in the Mediterranean world (iii) how and towards which targets monetary policy without a Central Bank was possible (iv) defining the targets of monetary policy and the mechanisms for its implementation (v) the role of money in the economy (vi) the issue of deficit spending (vii) the reasons of the replacement of the Athenian drachma as a leading currency by others from the Hellenistic period onwards (viii) the correlation of our findings regarding the decentralized character of monetary policy in Classical Athens to today’s realities, such as the issue of cryptocurrencies. Our analysis shows that monetary policy without a Central Bank was possible, with its foremost aim being the stability of the currency (mainly, silver coins) in order to enhance trust in it and so, make it an international currency which could outcompete other currencies. Since there was no Central Bank like today, monetary policy decisions were taken by the popular assembly of citizens in combination with the market forces themselves.
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13

Immanuel, Drogaba, and Essiena Yayamo. "Monetary Economics Overview Includes Monetary Policy Instruments, Functions and Impacts." Journal Dimensie Management and Public Sector 1, no. 2 (December 23, 2020): 20–26. http://dx.doi.org/10.48173/jdmps.v1i2.50.

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This study discusses monetary policy, the function and impact of monetary policy as well as the factors that influence the money supply. Monetary policy is a policy or regulation issued by the Central Bank which is used to manage a number of money supplies in a country to be able to create a specific purpose. The functions and impacts of monetary policy include maintaining an investment climate that occurs within the country, increasing the stability of economic growth in a country, overcoming high levels of unemployment and opening up a number of large employment opportunities, increasing the number of the balance of payments, maintaining the stability of value. the existing currency exchange is able to maintain a number of stability of the price of goods on the market. Factors that affect the amount of money circulating in society include the size of state spending, the fast and slow rate of money circulation, the motive for having cash, the transaction motive, the precautionary motive, and the speculative motive.
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14

Salvary, Stanley C. W. "Monetary Policy And Not Monetary Control: A Rethinking." Journal of Applied Business Research (JABR) 14, no. 1 (September 1, 2011): 91. http://dx.doi.org/10.19030/jabr.v14i1.5731.

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The view that prediction is the only important concern when policy is to be developed has led to the strict adherence to a money supply rule via the Quantity Theory of Money with its debilitating consequences. The monetarists place the emphasis on the level of the money supply in the determination of price level changes and monetary control is exercised. Along with this line of thinking, statistical elegance transcends empirical reality. Thus, the ensuing consequences of monetary control are not surprising. There are continuous increases in the general level of pries and increasing problems of unemployment, which fuel the flames of business downsizing. In this paper, an alternative to the monetarist explanation of the determination of the price level is advanced. The alternative explanation does not rely on changes in the supply of money but on changes in the composition of aggregate demand and supply. Absent monetary dislocation or revaluation of the currency, change in the general price level is attributed to the net effect of the realignment of relative prices. It is argued that a rethinking of the situation would results in monetary policy that is compatible with the economic setting and not monetary control which crowds out fiscal policy.
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15

Makrevska, Trajanka, and Gorica Popovska Nalevska. "MONETARY POLICY IN SMALL OPEN ECONOMY." Knowledge International Journal 28, no. 1 (December 10, 2018): 143–46. http://dx.doi.org/10.35120/kij2801143m.

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Money and stabilization are the central problems of macroeconomics and macroeconomic policy today. Since the Great Depression money policy has been getting significant meaning. Dirigible money is created in the true sense of the word, i.e. money that is fully subordinated to the purposes of the national economic policy.By leaving the automatism of the golden rule regarding the mechanism of the monetary regulation, not just inside the economy but also in the external economy, it led to taking over the responsibility of the state for the development of internal monetary situation and a system of international payment relations, i. e. external liquidity of the economy. The state takes over directly (with the Central bank) the responsibility for the monetary credit policy in general, for the regulation of money supply, and also for the regulation of the basic commodity-money relations inside the economy, the stability of the economy, prices and the exchange rate. Is monetary policy able to substantially support development, especially in small open economy? Yes. Adequate liquidity with relative price stability, credible monetary institutions and a high degree of confidence in the domestic currency and financial institutions and markets are one of the pillars of sustainable economic development. Small open economies are still far from these standards and still much can be improved.
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16

Freeman, Scott, and Finn E. Kydland. "Monetary Aggregates and Output." American Economic Review 90, no. 5 (December 1, 2000): 1125–35. http://dx.doi.org/10.1257/aer.90.5.1125.

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We ask whether the following observations may result from endogenously determined fluctuations in the money multiplier rather than a causal influence of money on output: (i) M1 is positively correlated with real output; (ii) the money multiplier and deposit-to-currency ratio are positively correlated with output; (iii) the price level is negatively correlated with output; (iv) the correlation of M1 with contemporaneous prices is substantially weaker than the correlation of M1 with real output; (v) correlations among real variables are essentially unchanged under different monetary-policy regimes; and (vi) real money balances are smoother than money-demand equations would predict. (JEL E300, E510)
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17

Rocheteau, Guillaume, Randall Wright, and Cathy Zhang. "Corporate Finance and Monetary Policy." American Economic Review 108, no. 4-5 (April 1, 2018): 1147–86. http://dx.doi.org/10.1257/aer.20161048.

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We develop a general equilibrium model where entrepreneurs finance random investment opportunities using trade credit, bank-issued assets, or currency. They search for bank funding in over-the-counter markets where loan sizes, interest rates, and down payments are negotiated bilaterally. The theory generates pass-through from nominal interest rates to real lending rates depending on market microstructure, policy, and firm characteristics. Higher banks' bargaining power, for example, raises pass-through but weakens transmission to investment. Interest rate spreads arise from liquidity, regulatory, and intermediation premia and depend on policy described as money growth or open market operations. (JEL E43, E52, G21, G31, G32, L26)
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18

Ismailov, Alisher. "MAINTENANCE OF THE MONETARY SYSTEM STABILITY IN UZBEKISTAN." European Journal of Business and Economics 8, no. 3 (October 10, 2013): 1. http://dx.doi.org/10.12955/ejbe.v8i3.385.

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During the years of independence, the Republic of Uzbekistan has succeeded in building the modern monetary system. The national currency was introduced, monetary and currency markets have been developed along with the provision of independence of the Central Bank. However, the stability of national monetary system has not been ensured yet. In particular, the monetization level of the economy remains low, while the GDP deflator is rather high. In addition, high level of national currency devaluation is observed in recent years.Eventually all these urgent problems will negatively influence the stability of macroeconomic growth. The relatively high level of the GDP deflator (GDP deflator reflects a more realistic rate of inflation) has led to the significant growth of the money supply, which resulted in a strong devaluation of the national currency of Uzbekistan. For example, in 2012 the devaluation level of the national currency against the U.S. dollar was 10.5%. In addition, because of the low monetization coefficient, a crisis of defaulted payments among business entities has arisen.The author proposes to increase the volume of foreign currency swap and Gold Swap operation of the Central Bank of Uzbekistan in order to decrease the devaluation of the national currency. The author also suggests increasing the flexibility of monetary policy instruments such as an open market policy and reserve requirements to ensure the stable growth of the money supply.
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19

Ngotran, Duong. "Interest on reserves, helicopter money and new monetary policy." PLOS ONE 16, no. 7 (July 19, 2021): e0253956. http://dx.doi.org/10.1371/journal.pone.0253956.

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We build a nonlinear dynamic model with currency, demand deposits and bank reserves. Monetary base is controlled by central bank, while money supply is determined by the interactions between central bank, commercial banks and public. In economic crises when banks cut loans, monetary policy following a Taylor rule is not efficient. Negative interest on reserves or forward guidance is effective, but deflation is still likely to be persistent. If central bank simultaneously targets both interest rate and money supply by a Taylor rule and a Friedman’s k-percent rule, inflation and output are stabilized. An interest rate rule policy is just a subset of a more general monetary policy framework in which central bank can move interest rate and money supply in every direction.
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20

Ashari, Mirza Purta. "Currency and the Stability of People's Purchasing Power in Indonesia through Al-Maqrizi's Review." Journal of Islamic Civilization 3, no. 1 (April 30, 2021): 48–56. http://dx.doi.org/10.33086/jic.v3i1.1787.

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The presence of money has become an important part of people's daily lives, as well as the purchasing power of the people as an important element in the smooth economic cycle. The emergence of money came from the development of transactions that initially used barter which was later replaced by currency as a medium of exchange for international trade. Money management can be done by the government by controlling money in the form of monetary policy. This policy was a benchmark for a country's economy, when the state was able to control money well, the people's economy was also prosperous. The qualitative descriptive approach was used in this study. This article tried to provide views and discussion material to what extent the concept of monetary policy according to Al-Maqrizi and the implementation of his thinking was used in policymaking on people's purchasing power. The result of this research was that the concept offered by Al-Maqrizi was a concept of money that led to a moral, just, humane, and prosperous economy.The presence of money has become an important part of people's daily lives, as well as the purchasing power of the people as an important element in the smooth economic cycle. The emergence of money came from the development of transactions that initially used barter which was later replaced by currency as a medium of exchange for international trade. Money management can be done by the government by controlling money in the form of monetary policy. This policy was a benchmark for a country's economy, when the state was able to control money well, the people's economy was also prosperous. The qualitative descriptive approach was used in this study. This article tried to provide views and discussion material to what extent the concept of monetary policy according to Al-Maqrizi and the implementation of his thinking was used in policymaking on people's purchasing power. The result of this research was that the concept offered by Al-Maqrizi was a concept of money that led to a moral, just, humane, and prosperous economy.
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21

Doan Van, Dinh. "Money supply and inflation impact on economic growth." Journal of Financial Economic Policy 12, no. 1 (July 29, 2019): 121–36. http://dx.doi.org/10.1108/jfep-10-2018-0152.

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Purpose At present, countries are concerned about inflation and the impact of inflation on each country’s economic growth. This inflation has been said by economists that inflation is a phenomenon of currency and currency, which has caused inflation in some countries by their monetary policy. According to the economic theory of Karl Marx, Irving Fisher, Friedman, inflation is caused by a continuous increase in the money supply. Design/methodology/approach The economic theories of Fisher, Friedman and an econometric model are applied to analyse the relationship between money supply and inflation. Besides, Vietnam’s and China’s research data are also collected in the period of 2012-2016. Findings It is found out that the continuous increase in the money supply causes inflation in the long-term, but the continuous increase in the money supply growth does not cause inflation in a short time, this was analyzed based on the theory of monetary quantity. Moreover, Chia’s and Vietnam’s correlations of the money supply growth and inflation are 99.1 per cent. These correlations are very close. Originality/value Research results show that money supply and inflation are closely related, and the money supply directly affects economic growth. Therefore, the government should have the relevant monetary policy to grow the economy and proposals to make monetary policy, control inflation levels and stimulate economic growth.
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22

Tule, Moses K., Taiwo Ajilore, and Augustine Ujunwa. "Monetary Policy Contagion in the West African Monetary Zone." Foreign Trade Review 54, no. 4 (November 2019): 375–98. http://dx.doi.org/10.1177/0015732519874219.

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The study utilized quarterly time series data for Nigeria and three selected West African Monetary Zone (WAMZ) countries for the period 1980–2016 to verify whether monetary policy shocks emanating from Nigeria are an important source of macroeconomic fluctuations in WAMZ economies. The study complemented the Global vector autoregressive method with the Diebold–Yilmaz (2009) connectedness weights computation for the analysis. Inferences from generalized impulse response function (GIRF) analysis indicated that an unanticipated Nigerian monetary policy shock depreciates the Nigeria–USA exchange rate, stimulates growth, decelerates inflation and expands the money stock in the short run for Nigeria. In Ghana, Nigeria’s monetary policy shocks similarly depreciates the exchange rate, slows growth with high inflationary impact in the short run. In the Gambia, unanticipated shocks emanating from Nigeria strengthens the Gambia–USA exchange rate, depresses growth and inflationary pressures. Sierra Leone shares the appreciation of its currency with the Gambia, in addition to an economic expansion and rising inflation. Money supply also increases to accommodate the expanding demand. These results validated the thesis that there exist considerable geographical linkages within the WAMZ regions through which macroeconomic fluctuations are transmitted. For policy, monetary authorities in the region should collectively address the question of how to stabilize the economy in response to monetary policy shocks emanating from Nigeria. JEL Codes: E52, E32, E65, F02
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23

Manuelli, Rodolfo, and Thomas J. Sargent. "ALTERNATIVE MONETARY POLICIES IN A TURNPIKE ECONOMY." Macroeconomic Dynamics 14, no. 5 (November 2010): 727–62. http://dx.doi.org/10.1017/s1365100509990940.

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This paper modifies a Townsend turnpike model by letting agents stay at a location long enough to trade some consumption loans, but not long enough to support a Pareto-optimal allocation. Monetary equilibria exist that are nonoptimal in the absence of a scheme to pay interest on currency at a particular rate. Paying interest on currency at the optimal rate delivers a Pareto-optimal allocation, but a different one than the allocation for an associated nonmonetary centralized economy. The price level remains determinate under an optimal policy. We study the response of the model to “helicopter drops” of currency, steady increases in the money supply, and restrictions on private intermediation.
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24

Blain, Bob. "A Metric for Money." Perspectives on Global Development and Technology 15, no. 1-2 (January 14, 2016): 38–59. http://dx.doi.org/10.1163/15691497-12341374.

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The argument advanced here is that money worldwide has no recognized metric, no measuring instrument that defines the value of national currencies. In place of a metric, economists have substituted price indexes and monetary policy. Unanchored to economic realities, money numbers have dispersed in ever-greater inequality. At the same time, the proper metric for money has been the center of gravity of currency exchange rates, unrecognized, the de facto world money metric, for as long as the International Monetary Fund has published the data to see it. That metric is work time. It now needs to be adopted de jure as the world money unit.
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25

Li, Yiting, and Guillaume Rocheteau. "ON THE THREAT OF COUNTERFEITING." Macroeconomic Dynamics 15, S1 (December 16, 2010): 10–41. http://dx.doi.org/10.1017/s1365100510000544.

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We study counterfeiting of currency in a search-theoretic model of monetary exchange. In contrast to Nosal and Wallace [Journal of Monetary Economics 54, 229–246 (2007)], we establish that counterfeiting does not pose a threat to the existence of a monetary equilibrium; i.e., a monetary equilibrium exists irrespective of the cost of producing counterfeits, or the ease with which genuine money can be authenticated. However, the possibility of counterfeiting fiat money can affect its value, velocity, output, and welfare, even if no counterfeiting occurs in equilibrium. We provide two extensions of the model under which the threat of counterfeiting can materialize: counterfeits can circulate across periods, and sellers set terms of trade in some matches. Policies that make the currency more costly to counterfeit or easier to recognize raise the value of money and society's welfare, but the latter policy does not always decrease counterfeiting.
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26

Engdahl, Torbjörn, and Anders Ögren. "Multiple paper monies in Sweden 1789–1903: substitution or complementarity?" Financial History Review 15, no. 1 (April 2008): 73–91. http://dx.doi.org/10.1017/s0968565008000061.

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AbstractComplementarity of money means that two or more kinds of monies together fulfil the demands of the users better than they would without the existence of the other(s). In this article we study complementarity between paper monies in Sweden. We address four questions: 1. What was used as money at a macro-level (money supply) and at a micro-level (monetary remittances)? 2. What was the relative value of different monies in parallel circulation? 3. Were there seasonal variations in use and/or value of these monies? 4. Were there geographical variations in use and value? What we find is that the complementarity helped to solve the problem of providing sufficient liquidity domestically over time and space and thus contributed to the maintenance of a stable value of the currency.
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Zharikov, Mikhail V. "Parallel Currency Regimes in the Area of Financial Integration." World of Economics and Management 19, no. 4 (2019): 5–13. http://dx.doi.org/10.25205/2542-0429-2019-19-4-5-13.

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The study presented in the article seems rather relevant due to the fact that the problem of indebtedness in the eurozone members has not been solved yet, and these countries still continue to accumulate debts. Therefore, the eurozone members are expected to find effective ways to restore competitiveness after the crisis of 2009‒2012 without exiting the single currency agreement. The research is aimed at encompassing the relations which come into being as a result of credit use, money circulation, and money transfer payments. Consideration of these issues seems very important since it can help restore the loss of monetary independence. The subject of the article is the ways to denominate debt securities in the currency units under the control of the national governments and the central bank. The main purpose of the paper is to develop the approaches to parallel circulation of a single currency unit which can be devalued to solve the debt problems. The practical significance of the article lies in the possibility to use the European experience in solving the problems of common currency circulation in the process of Eurasian currency and financial integration. In terms of economic theory, the results and general outcomes of the work are important for the development of a concept to rationalize monetary policy and money circulation. In conclusion, the article proposes a parallel currency circulation regime which allows a member country of the currency agreement to stay in the common currency area and retain some functions of the monetary policy which were sacrificed due to the creation and operation of the common central bank.
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ROUSSEAU, PETER L. "A common currency: early US monetary policy and the transition to the dollar." Financial History Review 13, no. 1 (March 31, 2006): 97–122. http://dx.doi.org/10.1017/s0968565006000072.

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The transition of the US money supply from the mixture of paper bills of credit, certificates and foreign coins that circulated at various exchange rates with the British pound sterling during the colonial period to the unified dollar standard of the early national period was rapid and had far-reaching consequences. This article documents the transition and highlights the importance of this standardisation in bringing order to the nation's finances and in facilitating the accumulation and intermediation of capital. It describes how the struggle of the colonies to maintain viable substitutes for hard money set the stage for the financial leaders of the Federalist period to settle upon the dollar, attach it to a convertible metallic base, and create a national bank that issued notes denominated in the new monetary unit. It also presents recently constructed estimates of the US money stock for 1790–1820 and relates them to measures of the nation's early modernisation.
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29

Sasongko, Gatot. "MONETARY POLICY AND THE CAUSALITY BETWEEN INFLATION AND MONEY SUPPLY IN INDONESIA." Business: Theory and Practice 19 (May 30, 2018): 80–87. http://dx.doi.org/10.3846/btp.2018.09.

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Conceptually and empirically, inflation volatility in Indonesia is a monetary and fiscal phenomenon. This study focuses on the macroeconomic policy and public policy especially causality between two variables namely inflation and money supply in Indonesia. This study uses Indonesian macroeconomic data of inflation and money supply from the Bank of Indonesia publication during 2007.1–2017.7. Inflation is measured by the consumer price index, reflects the annual percentage change in costs of acquiring a basket of goods and services to the average consumers that may change at specified intervals. Meanwhile, money supply is measured by the currency, demand deposits, time deposits, and saving deposits. Methodically, this study uses the Granger Causality model to determine the causality between inflation and money supply. The results show that there is a one-way causality between inflation and money supply in Indonesia. These findings imply that money supply causes inflation, but not vice versa. This condition implies that the role of Indonesian Government and Bank of Indonesia were very crucial in managing and controlling macroeconomic policy and public policy. Then, analysis of money supply and inflation also related to impacting factors such as money laundering, role of banks, taxation, tax evasion, and corruption.
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Fantacci, Luca. "The dual currency system of Renaissance Europe." Financial History Review 15, no. 1 (April 2008): 55–72. http://dx.doi.org/10.1017/s096856500800005x.

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AbstractThe monetary system of late medieval and early modern Europe has been commonly described as irrational, in the light of later commodity money standards. In particular, the alterations in the legal value and/or in the metal content of most coins throughout this period have been regarded as a source of disorder and as a product of ignorance and abuse. This article suggests that the whole system, and its apparently awkward articulations, may have been deliberately designed to ensure complementarity between domestic and foreign trade. From this perspective, monetary alterations appear as the levers of a peculiar form of monetary policy, with an extra degree of freedom compared to more modern instruments, and equally open to being managed or mismanaged.
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31

Jastrzębski, Robert. "Currency Reforms in the Polish State After 1945. Legaleconomic Issues." Studia Historiae Oeconomicae 35, no. 1 (December 20, 2017): 97–111. http://dx.doi.org/10.1515/sho-2017-0007.

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Abstract The subject of the article are currency reforms that were carried out after the Second World War in the Polish state. The first legal regulations from 1944 - 45 concerned the unification of the money circulation, which in practice meant the exchange of occupation money for the new currency. However, the repayment of financial claims made before the outbreak of the war was regulated by a decree of 1949. Another monetary reform concerned the new, socialist economic policy of the Polish state. The basis for it was the Act of October 28, 1950 on the change of the monetary system. After this reform, periodic changes in prices and wages were introduced, which were not based on strictly legislative solutions. In practice, these ordinances were in the nature of new monetary reforms. The Act of 1950 was repealed by the Act of 7 July 1994 on the denomination of the zloty.
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Naqellari, Alqi, and Sokol Paҫukaj. "Albania's Central Bank's Monetary Policy Has Failed." Journal of International Cooperation and Development 2, no. 2 (November 10, 2019): 73. http://dx.doi.org/10.36941/jicd-2019-0014.

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The subject of this paper will be the Central Bank's monetary policy in terms of the Albanian monetary market. Its purpose will be to determine the effects of monetary policy, its consequences on some of the key macroeconomic indicators. From the analysis of data, it was found that the Central Bank's policy, which has its main objective, "achieving and preserving the level of prices", is applied in the conditions of an unequal monetary market, because the money market is almost divided equal to 50/50 between currency and local currency (All). These main internal factors, and other external factors, have made the monetary policy applied by the Central Bank to have no impact or have negative consequences on key macroeconomic indicators. Central Bank monetary policy is currently smothered. Some of the negative consequences are: the decline of the impact on the inflation indicator, the transition of the Albanian economy to the "liquid trap", the change in the structure of deposit usage in favor of debt instruments, decrease of deposits in total and deposits in lek, the decline in purchasing power of deposits, the reduction of credit and the change of their structure, consequently the reduction of productive investments, euro depreciation, trade deficit growth, etc. Under these conditions, only fiscal policies have an impact. In order for the Central Bank's policies to become effective, with concrete implications on the economic indicators, fundamental changes need to be made. First, change its main objective by having the main objective "currency stability and economic growth" secondly, to establish a fully state-owned commercial bank in order to support the monetary policies and key sectors of the economy. The methods used in this paper are the method of description, comparison, analysis and synthesis, statistical methods etc.
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WAN, Jing. "Renminbi Joins International Monetary Fund’s Special Drawing Rights Basket: Rationale and Significance." East Asian Policy 09, no. 03 (July 2017): 76–84. http://dx.doi.org/10.1142/s1793930517000289.

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After the 2008 financial crisis, the International Monetary Fund realises that reforms are needed to reduce the reliance on the US dollar as the only international reserve currency. It began to nurture super-sovereign reserve money where SDR (Special Drawing Rights) is the most favourable candidate. Joining SDR will push forward China’s exchange rate reform to meet the standard of a real international reserve currency, which requires more skilful domestic and international policy coordination.
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34

DZYUBLYUK, Oleksandr. "THEORETICAL ASPECTS OF DETERMINING THE VALUE OF MONEY, DEPENDING ON THEIR FORMS IN CIRCULATION." WORLD OF FINANCE, no. 1(54) (2018): 82–94. http://dx.doi.org/10.35774/sf2018.01.083.

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Introduction. The development of forms of money and the evolution of monetary relations affected the assessment of the value of the monetary unit. The problem of understanding the value of money is also complicated by the fact that value is the reflection of the worth of an object, expressed in money, estimating the value of money itself, which is the basis for the effective organization of monetary relations and commodity exchange. Under such circumstances, the rationale for adequate theoretical approaches to understanding the value of money is one of the important tasks in the process of implementing an effective monetary policy as a means of ensuring macroeconomic equilibrium, low inflation and economic growth. Purposes. The purpose of this article is to substantiate and systematize theoretical views on understanding the value of money in the light of the evolution of their forms in the development of monetary relations and those changes that took place in the basic principles of the organization of the monetary system, as well as the formulation of those recommendations for optimizing the basic principles of monetary policy , which should be aimed at ensuring the stability of monetary circulation and the normal functioning of the national economy. Results. The fundamental theoretical approaches to assessing the value of money in the development of money relations and changes in the forms of money in circulation are analyzed and systematized. The article defines the methodological foundations for understanding the value of money and its change, depending on the internal value of a material substance that serves as a general equivalent in the current historical period. Conclusion. An adequate understanding of the value of money serves as the cornerstone of the formation of the principles of monetary policy in a situation where the emission activity of the central bank and its task of maintaining the stability of the national monetary unit are directly determined by the need to bind the aggregate money supply to the needs of the overturn of goods and services. Awareness of the concepts of the value and price of money allows formulating the factors of influence on the stability of the national currency: 1) the stability of prices for goods, reflecting the correspondence of money supply and commodity turnover; 2) the stability of interest rates as the price of credit, which determines the role of money as a factor of production; 3) stability of the exchange rate reflecting the foreign values of the national currency. The main task of the state in the formulation and implementation of economic policies is to maintain the value of the monetary unit at an unchanged level, which is a key condition for successful economic development and the welfare of society.
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35

Sõrg, M. "Estonian currency board and economic performance." South African Journal of Economic and Management Sciences 1, no. 3 (September 30, 1998): 463–82. http://dx.doi.org/10.4102/sajems.v1i3.2557.

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The sole function of an orthodox (or "pure") currency board was to issue paper money fully backed by foreign assets, for which it was exchangeable at a fixed rate. Present-day currency board arrangements, however, are usually coupled with certain instruments of monetary policy too, albeit less extensive than in the case of conventional central banks. This paper sketches the establishment of the Estonian currency board in 1992, and its subsequent impact on the economic reform and performance in Estonia.
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36

Zhang, Huiyi, Richard Skolnik, Yu Han, and Jinpei Wu. "The Impacts of China's Shadow Banking Credit Creation on the Effectiveness of Monetary Policy." International Journal of Finance & Banking Studies (2147-4486) 9, no. 4 (October 20, 2020): 33–46. http://dx.doi.org/10.20525/ijfbs.v9i4.899.

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This paper researches the impact that shadow banking in China has upon credit creation and the potential effectiveness of monetary policy. Using a credit creation model, we derive the effect that shadow banking has upon the money multiplier and the money supply. The model shows that shadow banking can change the money multiplier, potentially increasing it during an expansion and decreasing it during a contraction. Introducing shadow banking in a CC-LM model results in a shift of the CC and LM curves resulting in a higher equilibrium output. A vector autoregressive model is used to empirically estimate the impact of shadow banking deposits' growth rate on the growth rates of the broad money supply, GDP, and the CPI. The results show that shadow banking's credit creation function in China has a pro-cyclical characteristic, potentially reducing the money supply's controllability and increasing the difficulty in effectively regulating monetary policy. This paper introduces shadow banking into the currency creation process of traditional commercial banks, accounting for the reserve requirement ratio, the excess reserve ratio, the shadow bank leakage rate, and the reserved deduction rate. Future research can determine whether coordinating monetary policy and leverage ratio regulation mitigates the impact of shadow banking. Another area of research is how the shadow banking of non-financial companies affect monetary policy.
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37

Bidabad, Bijan. "Islamic Monetary Policy and Rastin Swap Bonds." International Journal of Islamic Banking and Finance Research 3, no. 2 (May 25, 2019): 1–16. http://dx.doi.org/10.46281/ijibfr.v3i2.269.

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Purpose: This paper aims to examine monetary instruments in Islamic central banking framework. As a conclusion, to revive Islamic monetary policy, we should provide some public equity-based instrument as a necessary replacement for conventional bonds and treasury bills to activate non-usury open market operations. Design: We define a type of new negotiable bond as: “Rastin Swap Bonds (RSBs)”, which is based on swapping money between two persons for two different periods. Findings: RSB is a financial paper that observes the right for the lender to borrow an equal amount to his lending from the borrower. Four types of RSBs in domestic money and foreign currency are defined, and their Sharia allowances and monetary, fiscal, and financial effects are evaluated. Research limitations: This bond is a novel design, and it is required to be more elaborated for further practical development and adjustment. Practical implications: Islamic central banking is not different from conventional central banking as a whole, but the role of an Islamic central bank in conducting monetary policy is restricted to use interest-free monetary instruments in an environment that commercial banks are obliged to implement non-usury banking operations. Social implications: Islamic financial instruments should be usury-free and efficient in applying monetary, fiscal, and financial policies at different levels of the central bank, government and commercial banks and non-banking money and financial institutions. Rastin Swap Bond will serve as an important instrument for resource mobilization and will be a primary vehicle for the development of the Islamic capital market and central banking operations. Originality/value: Conventional interest-bearing bonds are not allowed in Islamic central banking. This restriction mostly distinguishes Islamic central banking from the conventional one in implementing monetary policy. Article Type: Technical paper JEL: G21, G28, H81
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38

Prates, Daniela. "Beyond Modern Money Theory: a Post-Keynesian approach to the currency hierarchy, monetary sovereignty, and policy space." Review of Keynesian Economics 8, no. 4 (October 20, 2020): 494–511. http://dx.doi.org/10.4337/roke.2020.04.03.

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This paper provides an alternative view of monetary sovereignty (MS) from the Neo-Chartalist approach found in the Modern Money Theory literature. The differences between the author's approach to MS and Neo-Chartalism cover the following aspects: the nature of money, the acceptability of money, and the relationship between the central bank and the Treasury. The paper then analyses the relationship between MS, the currency hierarchy (CH), and policy space. The focus is placed on emerging-market economies. It is argued that emerging-market economies' policy space is determined by the interplay of two factors: the degree of MS and the position of national money (that encompasses the state and bank monies) within the CH.
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39

Pepić, Marina, Srđan Marinković, Ognjen Radović, and Marko Malović. "Determinants of Currency Substitution in Southeast European Countries." Economic Themes 53, no. 2 (June 1, 2015): 162–84. http://dx.doi.org/10.1515/ethemes-2015-0010.

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AbstractCurrency substitution is widespread in less developed countries. Since it increases financial vulnerability and limits the effectiveness of monetary policy, it is often in the focus of scientists and experts. In this paper, we analyze the importance of euroization determinants in Serbia and neighboring countries - Albania, Bosnia and Herzegovina, FYR Macedonia, Romania and Croatia for the period 2003-2014. We examine the impact of domestic inflation, nominal exchange rate of the domestic currency against the euro, interest rate spread on domestic and foreign currency, foreign currency inflow in the form of foreign direct investments and exports, as well as the euroization of banks’financial resources on the degree of loan euroization. The results obtained by multiple regression panel methods confirm the statistical significance and assumed direction of the influence of all analyzed variables except inflation and current account balance.
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40

Kresak, Michał. "Mnożnik kreacji pieniądza – pojęcie, ograniczenia i krytyka." Ekonomia 25, no. 1 (May 13, 2019): 35–54. http://dx.doi.org/10.19195/2084-4093.25.1.3.

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Money multiplier — the concept, limitations and criticismThe article presents the money creation process in the modern economy, including the role of the central bank and commercial banks in this process. The concept of money multiplier is described and set in the context of Fed’s monetary policy since 1970s. Special attention is paid to the decrease of the M1 multiplier below the value of one, which accompanied the quantitative easing after the crisis arousal in 2008. Then, the main constraints are mentioned of commercial banks in the process of money creation impeding the full utilization of the multiplier potential: bank profitability and competitiveness, risk of bank runs, demand for currency, limitations concerning credit collaterals and those resulting from monetary policy, prudential regulations, and the behaviors of bank clients. The paper also reports on arguments critical toward the multiplier approach and suggests to perceive the money supply in the modern economy as an endogenously determined phenomenon: first, commercial banks grant as many credits thus creating money as they can owing to the market situation; then, they turn to the central bank to provide reserves. The latter provides reserves monetary base as the lender of last resort, aiming to control the interest rate, and not money quantity itself. The conclusions are significant for monetary policy and economic education, as the endogenous approach to money supply can explain why the quantitative easing, contrary to some concerns, did not automatically translate into a considerable increase of credit expansion and price inflation.
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41

MEHRLING, PERRY. "THE MONETARY ECONOMICS OF BENJAMIN GRAHAM: A BRIDGE BETWEEN GOODS AND MONEY?" Journal of the History of Economic Thought 33, no. 3 (September 2011): 285–305. http://dx.doi.org/10.1017/s105383721100023x.

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Benjamin Graham’s amateur proposal for a commodity reserve currency (1937, 1944) has attracted the attention of professional economists and policy makers, but usually for their own prior purposes and designs. This paper places the proposal in the context of Graham’s own time and the intellectual resources available to him, with a view to elucidating both Graham’s own sense of the proposal and the reasons the proposal earned the reception it did.
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42

Cai, Xiuyun. "Choice of the Path of Fiscal and Monetary Policy Coordination in China." Journal of Global Economy 5, no. 3 (September 30, 2009): 211–24. http://dx.doi.org/10.1956/jge.v5i3.82.

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he role of monetary policies regulating social the aggregate demand is highlighted, while the role in restructuring the supply and demand are greater limitations. The Central Bank indirectly affects the currency in circulation and the total size of credit by adjusting the statutory deposit reserve rate, the rediscount rate, open market operations; The Central Bank increases or decreases in money supply by limiting the loan quota and the currency issuance. Thus the role of the monetary policies in alleviating serious problems in the field of circulation area is more rapid, clear and effective. However, the central bank can not loan directly to a large number of economic development in lagging industries especially public goods industries as a result of the restrict of the credit funds movement, and therefore the role of monetary policies in improving the social structure and the rate relationship of national economy is relatively limited. The structural imbalance between domestic demand and external demand makes the Chinese economy affected seriously in the circumstances of the U.S. financial crisis and a sudden decline in global demand.
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43

Gómez, Georgina M. "Money as an Institution: Rule versus Evolved Practice? Analysis of Multiple Currencies in Argentina." Journal of Risk and Financial Management 12, no. 2 (May 8, 2019): 80. http://dx.doi.org/10.3390/jrfm12020080.

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Monetary policies and adjustments during a financial crisis depend on policy-makers’ conceptions on what money is and how it works. There is sufficient consensus among scholars that money is an institution created within the economic system and is in line with other institutions that regulate economic action. However, there are different understandings of what institutions are and how they operate, and these understandings imply differences in terms of monetary enforcement, resilience, responsiveness and stability. This paper discusses the two main approaches that conceptualise institutions as rules and as practices presenting an empirically informed discussion of money as an institution drawing on these insights. It grounds the analysis on the empirical case of Argentina as a monetary laboratory and the plurality of currencies that circulate in its economy. The study argues that while the official currency of Argentina corresponds to the institutions as rules approach, the adoption of the U.S. dollar into a bimonetary economy evolved as equilibrium. In between, the massive community currency systems that rose and declined during the economic meltdown between 1998 and 2002 were a hybrid institution that combined rules and practice. All three of them show various degrees of resilience and stability.
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44

Antipa, Pamfili M. "How Fiscal Policy Affects Prices: Britain's First Experience with Paper Money." Journal of Economic History 76, no. 4 (November 17, 2016): 1044–77. http://dx.doi.org/10.1017/s0022050716000978.

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For almost 25 years between 1797 and 1821, the gold standard in Britain was suspended in order to finance the Napoleonic Wars, creating a paper pound or a fiat currency. Suspension was accompanied by substantial inflation and the accumulation of public debt. By identifying shifts in the spot exchange rate of paper pounds for gold, I document how contemporaries' expectations of how debt would be stabilized in the future shaped the pound's internal value. Thus, it is argued that during the “paper pound” period, fiscal prospects provided a third mechanism, beyond monetary and real factors, affecting the price level.
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45

Aristiyowati, Endah Siska, and Telisa Aulia Falianty. "PERANAN PERKEMBANGAN INOVASI FINANSIAL SISTEM PEMBAYARAN DALAM MEMPENGARUHI PERMINTAAN UANG DI INDONESIA." EKUITAS (Jurnal Ekonomi dan Keuangan) 2, no. 3 (August 6, 2019): 404–26. http://dx.doi.org/10.24034/j25485024.y2018.v2.i3.128.

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This paper examines the dynamic interaction between financial innovation development in the payment system to money demand function especially for currency and narrow money, from 2007-2017 using Indonesia monthly data. This research based on Baumol (1952) and Tobin (1956) and Lippi and Secchi (2009) theory which stated that improvement of technology in the payment system will lead to a decrease in transaction demand for money. From estimation result using Vector Error Correction Model (VECM) method, study reveals that tremendous development in the payment system on the last eleven years i.e Real Time Gross Settlement, Clearing, Automatic Teller Machine (ATM)atauDebit Card, Credit Card and electronic money using several proxies, such as using transaction value (with and without clearing), total transaction value, transaction volume, ratio of financial innovation in the payment system to Gross Domestic Product (GDP), broad money (M2) to narrow money (M1) ratio, ratio of financial innovation in the payment system to narrow money (M1) will decrease currency and narrow money (M1). Analysis of the financial innovation in the payment system role in affecting money demand (currency and narrow money) is very important so that money demand function is not misspesificied and in determining monetary policy has considered the development of payment system technology.
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46

Chen, Yuxuan, Kejie Zhou, and Wenhao Yang. "The Research on the Money Supply of Central Bank Digital Currency." Journal of Finance Research 2, no. 2 (July 9, 2018): 27. http://dx.doi.org/10.26549/jfr.v2i2.790.

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Currently, the only central bank digital currencies (CBDC) in the world is Venezuela’s currency—Petro. Nowadays, the IMF, BIS, and major countries have conducted a lot of research on CBDC. It’s an urgent issue for the central bank to issue CBDC, determine and formulate the circulation of CBDC and the issuance speed, and supervise it. Therefore, establishing ARMA and VARs by sorting out literature, the paper uses the characteristics of CBDC--cash, and similarities with third-party payment in terms of payment to determine the circulation of CDBC by third-party payment users and currency in circulation. The model calculates and predicts the speed of circulation of digital currency. The issuance of CBDC will accelerate the circulation of money. In this regard, we will explore the impact of money supply on monetary policy and make relevant recommendations.
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47

Ramlall, Indranarain. "Broad Money Demand in Mauritius with Implications for Monetary Policy." Journal of Economics and Behavioral Studies 4, no. 8 (August 15, 2012): 436–48. http://dx.doi.org/10.22610/jebs.v4i8.345.

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This paper employs ECM approach to investigate the long run and short-run components of the broad money demand function in Mauritius for the period spanning from 2000 to 2009. To the author’s best knowledge, no study has been undertaken over broad money in Mauritius since 1992, with an update being long overdue. Results show that M2 is positively elastic with respect to GDP, with the elasticity coefficient revolving around 2.80%, clearly showing that Mauritius is not endowed with a fully developed financial system with monetization moving faster than output. The low adjustment coefficient for VECM furthers substantiates the fact that there is indeed a lack of alternative assets to M2 and above all fully justifies the transition from monetary targeting to interest rate targeting. Evidence is found in favor of foreign asset substitution but only through the exchange rate channel. Findings further show that the local stock market does not act as a substitute to local money holdings. Overall, the study points out a rather stable demand for money function in Mauritius so that the monetary authority can contemplate using it as a complementary tool but chiefly for long-run policy assessments.
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48

Williamson, Stephen D. "Liquidity, Monetary Policy, and the Financial Crisis: A New Monetarist Approach." American Economic Review 102, no. 6 (October 1, 2012): 2570–605. http://dx.doi.org/10.1257/aer.102.6.2570.

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A model of public and private liquidity integrates financial intermediation theory with a New Monetarist monetary framework. Non-passive fiscal policy and costs of operating a currency system imply that an optimal policy deviates from the Friedman rule. A liquidity trap can exist in equilibrium away from the Friedman rule, and there exists a permanent nonneutrality of money, driven by an illiquidity effect. Financial frictions can produce a financial-crisis phenomenon that can be mitigated by conventional open market operations working in an unconventional manner. Private asset purchases by the central bank are either irrelevant or they reallocate credit and redistribute income. (JEL E13, E44, E52, E62, G01)
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49

Okafor, Harrison Oluchukwu. "Estimating the Costs and Benefits of a Common Currency for the Second West African Monetary Zone (WAMZ)." Journal of Economics and Behavioral Studies 5, no. 2 (February 28, 2013): 57–68. http://dx.doi.org/10.22610/jebs.v5i2.380.

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This paper, estimates the costs and benefits of a common currency in WAMZ. Behavioral models capturing the elements of costs (asymmetric shocks, loss of monetary policy autonomy, and fiscal policy distortion), and benefits (trade creation, financial integration effects and policy coordination gains) were estimated using the Vector Auto-regression (VAR) procedure and panel estimation technique.VAR impulse response and forecast error method was used to determine the countries’ response to shocks while panel regression technique was used to estimate other behavioral equations. Fiscal policy distortion and loss of monetary policy autonomy are the main cost of monetary union in the zone while the potential trade creation gain is marginal. High disposition to money reserve and weak revenue base are the core determinants of fiscal policy distortion in the zone. Overall, the paper concludes that fiscal policy distortion constitutes serious policy challenge to monetary union in the zone. Dealing with this challenge may require short-run systematic macroeconomic adjustments to enhance the convergence of macroeconomic policy indicators in the zone.
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50

Khawaja, M. Idrees. "Exchange Market Pressure and Monetary Policy: Evidence from Pakistan." LAHORE JOURNAL OF ECONOMICS 12, no. 2 (July 1, 2007): 83–114. http://dx.doi.org/10.35536/lje.2007.v12.i2.a5.

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The study employs the Girton and Roper (1977) measure of exchange market pressure (defined as the sum of exchange rate depreciation and foreign reserves outflow), to examine the interaction between exchange market pressure and monetary variables, viz. domestic credit (Reserve Money) and the interest rate. Evidence from impulse response functions suggests that domestic credit has remained the dominant tool of monetary policy for managing exchange market pressure. The increase in domestic credit upon increases in exchange market pressure (during 1991-98) was imprudent. The results suggest that fiscal needs/growth objectives might have dominated external account considerations during this period. Post 9/11 there is evidence of sterilized intervention in the forex market. The interest rate has also weakly served as the tool of monetary policy during the hay days of foreign currency deposits (1991-98). The finding implies that, for the interest rate to work as tool of monetary policy vis-a-vis exchange market pressure, a reasonable degree of capital mobility is called for.
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