Some Alternative Monetary Facts

By Peter Stella, Manmohan Singh, Apoorv Bhargava

January 8, 2021

Preview Citation

Format: Chicago

Peter Stella, Manmohan Singh, and Apoorv Bhargava. Some Alternative Monetary Facts, (USA: International Monetary Fund, 2021) accessed November 19, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

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

Subject: Currencies, Demand for money, Inflation, Monetary aggregates, Monetary base

Keywords: Balance sheet expansion, Bank reserves, Central bank balance sheet, Financial market, Interest rate, Monetary financing, Money aggregates, Money demand, WP

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/006
Stock No:

WPIEA2021006
ISBN:

9781513566429
ISSN:

1018-5941

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