dollars, currency, money

Money Aggregates, Debt, Pent-Up Demand, and Inflation: Evidence from WWII

From Federico S. Mandelman, Federal Reserve Bank of Atlanta. Very nice written paper. The car example probably looks familiar. Summary:The COVID-19 pandemic produced a massive decline in U.S. consumption in 2020 andswift fiscal and monetary policy responses. After growing at a rather steady 5 percentrate for decades, the money supply (M2) increased 25 percent over […]

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The Persistent Decline in Asset Utilization and the Investment-q Paradox

This is a paper by Gustavo Grullon and David Ikenberry. Here is the abstract Despite Tobin’s q nearly doubling since the mid-1970s, the rate of corporate investment has fallen dramatically. We shed light on this paradox by decomposing q into three components relating to valuation, profitability, and asset utilization. This decomposition reveals that investment is […]

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Some Alternative Monetary Facts

… is the name of a recent IMF working paper by Peter Stella, Manmohan Singh and Apoorv Bhargava. The title is inspired by a 1995 paper “Some Monetary Facts” against which they argue amongst other things. As the following charts show we have recently seen an explosion in both base money and M2 in the […]

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