The central bank issuing policy and Fisher´s equation of exchange
The issue of money and establishing interest rates are the main activities of central banks. Through this, the banks immediately influence the behaviour of households, companies, financial markets and the state with the impact on real outcome, employment and prices. When monitoring the issue of mone...
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| Format: | Article |
| Language: | English |
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Nicolae Titulescu University
2013-05-01
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| Series: | Global Economic Observer |
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| Online Access: | http://www.globeco.ro/wp-content/uploads/vol/split/vol_1_no_1/geo_2013_vol1_art_007.pdf |
| _version_ | 1818118944537444352 |
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| author | Richard Pospíšil |
| author_facet | Richard Pospíšil |
| author_sort | Richard Pospíšil |
| collection | DOAJ |
| description | The issue of money and establishing interest rates are the main activities of central banks. Through this, the banks immediately influence the behaviour of households, companies, financial markets and the state with the impact on real outcome, employment and prices. When monitoring the issue of money, it is necessary to focus not only on its volume, but also on the attributes and functions carried by money. Among the first economists who considered the quality monetary aspect were J. Locke, D. Hume, D. Ricardo and others. The founders of modern monetarism of the 20th century were I. Fisher and M. Friedman. Fisher was the first to define the equation of monetary equilibrium in the present-day form. The objective of the paper is to point out different approaches to the equation and its modifications and different meanings of its variables. As regards the monetary aggregate M – Money – the paper also deals with the denomination of the aggregate to its various elements, which is significant for fulfilling monetary policy targets. This approach is very important especially at present in the time of crisis when central banks are performing their policy considering contradictory targets of price stability and economic growth. |
| first_indexed | 2024-12-11T05:02:21Z |
| format | Article |
| id | doaj.art-a11c4c28112046b995b4fe3611ef7171 |
| institution | Directory Open Access Journal |
| issn | 2343-9742 2343-9750 |
| language | English |
| last_indexed | 2024-12-11T05:02:21Z |
| publishDate | 2013-05-01 |
| publisher | Nicolae Titulescu University |
| record_format | Article |
| series | Global Economic Observer |
| spelling | doaj.art-a11c4c28112046b995b4fe3611ef71712022-12-22T01:20:07ZengNicolae Titulescu UniversityGlobal Economic Observer2343-97422343-97502013-05-01115765The central bank issuing policy and Fisher´s equation of exchangeRichard PospíšilThe issue of money and establishing interest rates are the main activities of central banks. Through this, the banks immediately influence the behaviour of households, companies, financial markets and the state with the impact on real outcome, employment and prices. When monitoring the issue of money, it is necessary to focus not only on its volume, but also on the attributes and functions carried by money. Among the first economists who considered the quality monetary aspect were J. Locke, D. Hume, D. Ricardo and others. The founders of modern monetarism of the 20th century were I. Fisher and M. Friedman. Fisher was the first to define the equation of monetary equilibrium in the present-day form. The objective of the paper is to point out different approaches to the equation and its modifications and different meanings of its variables. As regards the monetary aggregate M – Money – the paper also deals with the denomination of the aggregate to its various elements, which is significant for fulfilling monetary policy targets. This approach is very important especially at present in the time of crisis when central banks are performing their policy considering contradictory targets of price stability and economic growth.http://www.globeco.ro/wp-content/uploads/vol/split/vol_1_no_1/geo_2013_vol1_art_007.pdfissue of moneycentral bankmonetary policymonetary equilibriummoney aggregatesmonetarismIrving FisherMilton Friedman |
| spellingShingle | Richard Pospíšil The central bank issuing policy and Fisher´s equation of exchange Global Economic Observer issue of money central bank monetary policy monetary equilibrium money aggregates monetarism Irving Fisher Milton Friedman |
| title | The central bank issuing policy and Fisher´s equation of exchange |
| title_full | The central bank issuing policy and Fisher´s equation of exchange |
| title_fullStr | The central bank issuing policy and Fisher´s equation of exchange |
| title_full_unstemmed | The central bank issuing policy and Fisher´s equation of exchange |
| title_short | The central bank issuing policy and Fisher´s equation of exchange |
| title_sort | central bank issuing policy and fisher´s equation of exchange |
| topic | issue of money central bank monetary policy monetary equilibrium money aggregates monetarism Irving Fisher Milton Friedman |
| url | http://www.globeco.ro/wp-content/uploads/vol/split/vol_1_no_1/geo_2013_vol1_art_007.pdf |
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