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Monetary Policy Implementation: Theory, Past, and Present Ulrich Bindseil
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I can almost guarantee you that if you have taken an economics class this formula was on your first page of notes. In it, and elsewhere on Steve's website he makes a few fundamental points on the current state of monetary policy. €� If we look back at recent history, they've tried in the past to have rigid exchange rates, and each time it has broken down. On purely theoretical grounds, it's hard to believe that it's going to be a stable system for a long time. In an Econ-101 world you hold the velocity (V) and, since we're talking about monetary policy here, the output (Y) is also constant, because monetary policy can't change the factors of production. In it, was the first example I'd ever seen of a system dynamics, stock-flow model for monetary theory. The paper is surprisingly comprehensible! Policy from that of Spain or Italy. I know it's that legal-constitutional stuff again, but really a rules-based approach to fiscal and monetary policy from the start might have avoided the need for the present discussions. He argues I didn't finish the very last step in the paper which is Keen's argument against debt being “anti-money”, but I will definitely come back to this and try to implement some more things here. The M*V=P*Y (the Quantity Theory of Money) framework is what many investors and economists have been working from.