Monetary aggregates
Icelandic MP posits radical monetary reform
Report proposes scrapping fractional reserve banking and handing Central Bank of Iceland authority over money creation; central bank says it is not considering the plans further
Money-inflation link shows signs of breaking down - Bundesbank paper
Researchers present evidence that money growth and inflation are losing synchronicity in the medium- to long-run, although the relationship still holds in the very long-run
China should adopt new intermediate target for monetary policy, say IMF economists
Economists at the IMF analyse demand for money in China and conclude the PBoC would be better off targeting interest rates in the economy rather than monetary aggregates
Korean paper says welfare cost of inflation is ‘underestimated’
Study contends that treating assets within M1 – the measure of cash and liquid assets in the economy – as non-interest-bearing in models fails to take into account full cost of inflation
Bangladesh Bank seminar argues inflation differential is a monetary phenomenon
Researchers present evidence of reasons behind inflation differential between Bangladesh and India; say gap was greater when money supply in Bangladesh was growing faster
RBI paper investigates relationship between liquidity types
Researchers study a variety of liquidity indicators to determine the links between them; argue that although there is a relationship, this nevertheless may not be a suitable guide to policy
BoE statistics indicate slight improvements in UK lending
Lending statistics show decline in lending to UK businesses lessens slightly while loans to individuals increase; overall M4 lending shows slight increase
St Louis Fed research stresses importance of money
Working paper argues that money is essential in determining prices, despite monetary aggregates being largely ignored by central banks; says central banks have limited power over interest rates
US overestimates welfare costs of inflation: Bank of Italy paper
A new study says the miscalculated welfare costs of US inflation due to the exclusion of foreign dollar holdings in M1 could have significant implications
Fed’s Lockhart recommends renewed focus on monetary, credit aggregates
Atlanta Fed president also advocates Taylor-type rule to manage exit
Fed reviews use of monetary aggregates in policymaking
Federal Reserve study says use of monetary aggregates should be considered for monetary policy decision making
Pay attention to monetary aggregates: Canada’s Macklem
Bank of Canada senior deputy governor Tiff Macklem says interest rate transmission blockages make money, credit data key in crisis; adds voice to growing chorus of central bankers
Argentina lets non-banks into debt sale
Argentine central bank throws open note auction to companies, allowing them to circumvent secondary markets; move linked to rapid expansion of money supply
Monetary aggregates remain about price, not financial, stability: ECB’s Stark
ECB Executive Board member Jürgen Stark says critics-cum-champions of monetary analysis are wrong once more about the true purpose
Follow the money
Monetary aggregates are set for a comeback in central banking, but as indicators of financial instability, not inflation. Claire Jones reports
Interview: Otmar Issing
The architect of the ECB’s monetary policy framework talks to Robert Pringle about his new book and the challenges central bankers face at the moment