Some Alternative Monetary Facts

Author/Editor:

Peter Stella ; Manmohan Singh ; Apoorv Bhargava

Publication Date:

January 8, 2021

Electronic Access:

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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.

Series:

Working Paper No. 2021/006

Frequency:

regular

English

Publication Date:

January 8, 2021

ISBN/ISSN:

9781513566429/1018-5941

Stock No:

WPIEA2021006

Format:

Paper

Pages:

39

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