## Some Alternative Monetary Facts

_IMF Working Papers, January 8, 2021_

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## Bibliographic details
- Authors: Peter Stella, Manmohan Singh
- Published: January 8, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513566429.001

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### Overview
- Authors: Peter Stella, Manmohan Singh
- Date: January 8, 2021
- Purpose: Discuss the modern history of monetarism and its alternatives, and examine the changing empirical relationship of various measures of money and inflation.

### Key findings
- Previous naïve correlations between money and inflation as established in the 20th century literature have largely disappeared.
- The disappearance of those correlations cannot be taken as support for an increased reliance on permanent monetary finance.
- Rapid technological innovation in payments systems—both public and private—including in global pledged collateral markets, portends a declining demand for central bank liabilities.

### Policy implications
- Policymakers should not interpret the weakening empirical link between monetary aggregates and inflation as a justification for permanent monetary finance.
- Monetary and fiscal authorities need to account for the effects of payments-technology innovation and evolving collateral markets on money demand and central bank balance sheets.
- Attention to the changing demand for central bank liabilities is warranted when designing monetary frameworks and operational tools.

### Subjects and keywords
- 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

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- **Working Paper**
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_Source: https://www.imf.org/en/publications/wp/issues/2021/01/08/some-alternative-monetary-facts-49975_