The measurement and analysis of monetary transactions

Article Abstract:

Transactions associated with output production (TOP) is a new way of measuring the flow of transactions backed by money, and it can help break up the income velocity of money into two analytical divisions: the incomes to transactions ratio, and the velocity of money transactions. TOP can be calculated using similar data as are used for national income measurement. This division gives a clearer understanding of what has recently happened to the income velocity of money. Transactions velocity can also be broken down by sector. Total changes of aggregate velocity appear to be proportionally more affected by central and local government and business than by households.

Gross national product, Capital movements

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Interest rate smoothness and the nonsettling-day behaviour of banks

Article Abstract:

A differential has been noted in equilibrium interest rate variance on settling and nonsettling days, the latter being lower, according to a study of the nonborrowed reserve period when the federal funds rate was less under the control of the Federal Reserve. An explanation for this differential is that nonsettling day rates are linked to expectations of settling day rates in addition to shocks affecting nonborrowed reserve levels. It also appears that regulatory factors could be a partial explanation for smoothness shown in the rate of non-settling day federal funds.

Central Reserve Depository, Interest rates, Federal Reserve banks

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Did monetarism die in the 1980s?

Article Abstract:

The growth of money has become increasingly volatile, while the opposite applies to other economic measures, and simple correlations between money and income no longer appear to be valid, but this can be explained by changes in inflation and interest rates. When interest rates and inflation are brought into the analysis, there appears to be consistency with earlier results. Monetarism thus, has not failed, rather the increase in money gowth volatility is due to a more effective contracyclical monetary policy.

Criticism and interpretation, Chicago school of economics, Monetarism

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