Monetary Economics

Monetary economics is a branch of economics that historically prefigured and remains integrally linked to macroeconomics. Monetary economics provides a framework for analyzing money in its functions as a medium of exchange, store of value, and unit of account. It considers how money, for example fiat currency, can gain acceptance purely because of its convenience as a public good. It examines the effects of monetary systems, including regulation of money and associated financial institutions and international aspects.

Modern analysis has attempted to provide a micro-based formulation of the demand for money and to distinguish valid nominal and real monetary relationships for micro or macro uses, including their influence on the aggregate demand for output. Its methods include deriving and testing the implications of money as a substitute for other assets and as based on explicit frictions.

Research areas have included:

  • empirical determinants and measurement of the money supply, whether narrowly-, broadly-, or index-aggregated, in relation to economic activity
  • debt-deflation and balance-sheet theories, which hypothesize that over-extension of credit associated with a subsequent asset-price fall generate business fluctuations through the wealth effect on net worth. and the relationship between the demand for output and the demand for money
  • monetary implications of the asset-price/macroeconomic relation
  • the quantity theory of money, monetarism, and the importance and stability of the relation between the money supply and interest rates, the price level, and nominal and real output of an economy.
  • monetary impacts on interest rates and the term structure of interest rates
  • lessons of monetary/financial history
  • transmission mechanisms of monetary policy as to the macroeconomy
  • the monetary/fiscal policy relationship to macroeconomic stability
  • neutrality of money vs. money illusion as to a change in the money supply, price level, or inflation on output
  • tests, testability, and implications of rational-expectations theory as to changes in output or inflation from monetary policy
  • monetary implications of imperfect and asymmetric information and fraudulent finance
  • game theory as a modeling paradigm for monetary and financial institutions
  • the political economy of financial regulation and monetary policy
  • possible advantages of following a monetary-policy rule to avoid inefficiencies of time inconsistency from discretionary policy
  • "anything that central bankers should be interested in."

Read more about Monetary EconomicsCurrent State of Monetary Economics

Other articles related to "economics, monetary economics, monetary, economic":

Colm Kearney - Publications - Book Chapters
... the 21st Century, Contemporary Studies in Economics and Financial Analysis, Volume 86, 29-51, Elsevier ... Owen (eds), Current Issues in Australian Economics, Allen and Unwin ... MacDonald (eds), Developments in Australian Monetary Economics, Longman Cheshire Press ...
Irving Fisher - Economic Theories - Monetary Economics
... On the other hand, his monetary economics did and this grew to be the main focus of Fisher’s mature work ... Index numbers played an important role in his monetary theory, and his book The Making of Index Numbers has remained influential down to the present day ... concluded from their theories that at the heart of the business cycle (and economic crisis) was government monetary policy, their disagreement would not be solved in their lifetimes, and indeed ...
Journal Of Monetary Economics
... The Journal of Monetary Economics is a peer-reviewed academic journal covering research on macroeconomics and monetary economics ...
Harry Gordon Johnson - Selected Works - Writings
... Johnson published many works on international and monetary economics theory ... In 1977 he was named a distinguished fellow of the American Economic Association, and in 1976 the Canadian government named him an officer of the Order of Canada ... “Optimum Tariffs and Retaliation.” Review of Economic Studies 21, no ...
Current State of Monetary Economics
... from inflation in the 1990s and the failure of pure monetary policy to stimulate the economy in the 2001-2003 period ... that the 2001-2003 failure of the expected economic recovery should be attributed not to monetary policy failure, but rather to the breakdown in productivity growth in crucial sectors of the ...

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