Sentences with phrase «increase in the money supply»

But the unprecedented increase in the money supply has not produced the intended the results.

By using the known rates of increase in the money supply and the population and a «guesstimate» of the rate of increase in labour productivity we can arrive at a theoretical rate of change for the purchasing power of money.

Thereafter, most central banks adjusted monetary policy to promote consistent increases in the money supply, even if it promoted chronic price inflation and encouraged debtors to borrow too much.

Since the Fed quit publishing M3 data, economists who have attempted to re-create the index from other available data have estimated M3 data would today be reporting upwards of a 10 - percent increase in the money supply, a high level by historical standards.

Thus, it is precisely the sharp decline in velocity that has offset the sharp increase in money supply, leading to the almost no change in nominal GDP (either P or Q).

This is true for currency as well: «Monetary inflation is a sustained increase in the money supply of a country.»

In addition, if we believe that the massive increase in the money supply will eventually lead to higher inflation, there is some degree of long - term inflation protection in core real estate.

Thereafter, most central banks adjusted monetary policy to promote consistent increases in the money supply, even if it promoted chronic price inflation and encouraged debtors to borrow too much.

Bank must have willing and creditworthy borrowers walk into their offices before any increase in the money supply can take place.

Because of the increase in the money supply, overall prices do not fall.

Increases in the money supply are therefore generally considered to be harmless or even beneficial as long as the purchasing - power of money is perceived to be fairly stable *.

In leading the revival of the old Quantity Theory, Friedman emphasised that money and prices were closely linked, and that increases in the money supply would lead mainly to higher prices, with no long term increase in real activity.

In other words, he believed prices could not increase without an increase in the money supply.

Rather, what seems to be true is that the strongest effect of an increase in the money supply is to drive short - term interest rates lower, thereby increasing liquidity preference (i.e. reducing velocity).

@HartCO Of course, things were easier when inflation meant «increase in money supply», i.e. how much money the banks printed «extra» (nowadays called «monetary inflation», as if that were the special case).

Some people believe that inflation is caused by an increase in the money supply when the banks print more notes engage in fractional reserve lending.

This increase in the money supply will put downward pressure on the U.S. dollar relative to the currencies of better - run economies.

If for some reason the money velocity declines rapidly during an expansionary monetary policy period, it can offset the increase in money supply and even lead to deflation instead of inflation.

# 1 Increase in money supply One of the most common reasons for prices increases is that the government raises our money supply or releases more currency in circulation, which then cause businesses to increase prices to maintain the same value for their products.

I guess the basic principle is that currency traders are watching the printing presses and trading in exchange markets to the point that the exchange rates fall in relation to increases in money supply.

Cutting interest rates, deficit spending and quantitative easing — printing money — all result in an increase in money supply which cause price bubbles in economies.