Normalising money growth is reducing inflation risks

Historical U.S. Money Growth, Inflation, and Inflation Credibility

and quantity indexes are calculated separately for components of GDP and therefore the difference between nominal GDP and real GDP growth is only approximately equal to the change in the GDP price index. With fixed-weights, the GDP deflator is defined as the ratio of nominal to real GDP and hence the gap between nominal and real GDP growth rates is precisely equal to the growth rate in the GDP ...

Are Money Growth and Inflation Still Related?

G E R A L D P . D W Y E R J R . A N D R . W . H A F E R Dwyer is vice president in charge of the financial section of the Atlanta Fed’s research department. Hafer is an Atlanta Fed visiting scholar and a professor of economics at Southern Illinois University-Edwardsville. They thank Lucy Ackert, Mark Fisher, Larry Wall, Warren Weber, and David C. Wheelock for comments and Shalini Patel for rese...

Commodity Money Inflation

This paper presents a theory of inflation in an economy with commodity money and supports it by evidence from the inflationary episodes in France during the fourteenth and fifteenth centuries. The paper shows that commodity money can be inflated similarly to fiat money through repeated debasements, which act like devaluation. Furthermore, as with fiat money, demand for commodity money falls wit...

Money and Inflation

Long Run Evidence on Money Growth and Inflation∗

Over the last two centuries, the cross-spectral coherence between either narrow or broad money growth and inflation at the frequency ω=0 has exhibited little variation–being, most of the time, close to one–in the U.S., the U.K., and several other countries, thus implying that the fraction of inflation’s long-run variation explained by long-run money growth has been very high and relatively stab...