The main correlations between the monetary-banking indicators
At the level of national economy, the essential problem is that of the use of financial resources. Of course, every society has its own resources, but that they are not always sufficient. To operate in a free market economy appears very often need to turn to the Bank’s resources in the form of loans...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2017-06-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1271.pdf
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| Summary: | At the level of national economy, the essential problem is that of the use of financial
resources. Of course, every society has its own resources, but that they are not always sufficient.
To operate in a free market economy appears very often need to turn to the Bank’s resources in
the form of loans. Credit implies the existence of credit resources on the part of the banking
system but, at the same time, it raises the question of the relationship between monetary mass in
circulation and monetary mass necessary to ensure market equilibrium required.
The banking system is defined and represented in the two sub-sectors, namely: monetary
authorities that it is a country’s National Bank and the system of commercial banks. Great
economists have noted that the imbalance between the monetary mass necessary and the
monetary mass in circulation may be, at some point, a problematic leading to financial crisis
and broader financial and economic crisis.
In this article we try to make an analysis based on data sources that stand available to any
researcher. Thus, as a first idea, we discuss about the Central Bank’s balance sheet, one that
offers the possibility of calculating the balance of equilibrium equation which shows a series of
correlations are established on the market. The second source of analysis and interpretation of
this market is the aggregate balance sheet of commercial banks. Based on this balance sheet is calculated the balance sheet equation which can give an accurate picture on the ratio between
the requirements and possibilities.
Also, in the article we referred to the monetary situation, especially consolidated monetary
situation, one who has existing monetary mass market in passive, and international reserves and
net domestic assets, in assets which are and must be in balance, i.e. the two indicators of assets
must equal monetary mass so that no imbalances.
In the article, we refer to the main correlations between monetary aggregates to embrace the
situation at a given time and to be able to conclude that evolution can be perspective in this
area. |
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| ISSN: | 1841-8678 1844-0029 |