Monetary Economics - Science topic

Dear Researchers, Scientists, Friends,

In the face of economic crises, governments and central banks are faced with the choice of appropriate tools to stimulate the economy. Expansionary fiscal policy involves increasing public spending and lowering taxes, while a tight monetary policy focuses on controlling the money supply and raising interest rates to combat inflation. For the purposes of this discussion, I have formulated the following research thesis: expansionary fiscal policy can lead to a faster economic recovery by increasing demand, but at the same time it can increase the budget deficit and public debt. On the other hand, a strict monetary policy can effectively control inflation, but it can also slow down economic growth and lead to higher unemployment. Therefore, the analysis of the effectiveness of both approaches requires taking into account the economic context, including the level of inflation, unemployment and the state of public finances. It is important to understand that fiscal and monetary policies are interrelated and their inconsistency can lead to undesirable effects. An example would be a situation where expansionary fiscal policy is pursued simultaneously with restrictive monetary policy, which can undermine the effectiveness of both measures. Furthermore, the reactions of the financial markets to such measures can be unpredictable, which further complicates the assessment of the effectiveness of individual policies.

I have written about the sources of the high inflation that has occurred since 2021 as a result of the Covid-19 pandemic in the following article:

THE POST-COVID RISE IN INFLATION: COINCIDENCE OR THE RESULT OF MISGUIDED, EXCESSIVELY INTERVENTIONIST AND MONETARIST ECONOMIC POLICIES

I have described crisis management in companies in the article:

CRISES IN THE ENVIRONMENT OF BUSINESS ENTITIES AND CRISIS MANAGEMENT

I have described the key issues of anti-crisis state intervention in my article below:

Anti-crisis state intervention and created in media images of global financial crisis

I have described the key aspects of the monetary policy pursued by central banks in recent years in the following article:

Comparisons of the monetary policy of the central banks of the Federal Reserve Bank and the European Central Bank and the National Bank of Poland

And what do you think about this?

What is your opinion on this matter?

Please reply,

I invite everyone to the discussion,

Thank you very much,

Best regards,

I invite you to scientific cooperation,

Dariusz Prokopowicz

Inflation is one of the most important challenges for monetary and fiscal policy. Central banks usually raise interest rates to limit the money supply and reduce inflationary pressure, but such a move can simultaneously weaken economic growth and increase unemployment. On the other hand, governments can use price regulations, subsidies and grants to mitigate the effects of inflation on citizens, but such measures can lead to market disruptions and further deepen economic imbalances. The question is whether it is better to fight inflation with classic monetary tools or with fiscal policy and administrative price regulation. For the purposes of this discussion, I have formulated the following research thesis, according to which raising interest rates by the central bank is a more effective tool in the long term, while government interventions may have short-term effects but lead to further market disruptions. This problem is therefore interdisciplinary in nature, as it affects both macroeconomics and economic policy. It requires an analysis of the impact of interest rates on the demand and supply of money, but also of the effects of government intervention on price dynamics and market behaviour. The final answer may depend on the economic context of the country concerned, the level of public debt, the structure of the labour market and the scale of global economic disruption.

My articles below are related to the above issue in some aspects:

I have described the key aspects of the monetary policy pursued by central banks in recent years in the following article:

I have written about the mild, synchronised monetary policy during the global financial crisis of 2008-2009 in the following articles, among others:

What do you think about this?

What is your opinion on this issue?

Please answer,

I invite everyone to the discussion,

Thank you very much,

Best regards,

I invite you to scientific cooperation,

Dariusz Prokopowicz

Dear Researchers, Scientists, Friends,

Central banks around the world are increasingly using low or zero interest rate policies to stimulate investment and consumption. Proponents argue that cheap loans encourage companies to grow and households to increase spending. Critics, on the other hand, point out that a long-term policy of zero interest rates can lead to speculative bubbles, excessive debt and financial problems in the future. According to the accepted research thesis, a long-term policy of zero interest rates leads to an increase in debt and a speculative bubble in the financial markets, which can result in an economic crisis. History shows that keeping interest rates low for too long can lead to irrational investment decisions, overheating of financial markets and an increase in social inequality. An example of this is the 2008 financial crisis, which was caused, among other things, by excessive monetary policy easing and easy access to mortgages. Interdisciplinary research combining economics, finance and behavioural psychology can help to determine optimal monetary policy strategies in a dynamically changing economy.

My articles below are related to the above issue in some aspects:

I have described the key aspects of the monetary policy pursued by central banks in recent years in the following article:

I have written about the mild, synchronised monetary policy during the global financial crisis of 2008-2009 in the following articles, among others:

What is your opinion on this issue?

Please answer,

I invite everyone to the discussion,

Thank you very much,

Best wishes,

I invite you to scientific cooperation,

Dariusz Prokopowicz

Globalisation makes national economies increasingly vulnerable to external economic shocks and speculative capital movements. Governments and central banks are faced with the dilemma of how best to stabilise the economy: is it better to pursue a restrictive fiscal policy and reduce debt, or to adopt a loose monetary policy to stimulate economic growth and avoid recession? This issue is crucial for economic management in the 21st century. A restrictive fiscal policy can lead to a reduction in public debt and improve the country's credibility in the financial markets, but at the same time it can limit public investment and economic growth. On the other hand, loose monetary policy can stimulate investment and consumption, but in the long run it threatens excessive private sector debt and rising inflation. This problem is further complicated by the fact that the effects of both policies depend on macroeconomic conditions and the level of integration of the national economy with international markets.

My following articles are related to the above issues in some aspects:

O źródłach wysokiej inflacji jaka wystąpiła po pandemii Covid-19 od 2021 roku na podstawie przeprowadzonych badań napisałem w poniższym moim artykule:

Kluczowe aspekty prowadzonej w ostatnich latach przez banki centralne polityki monetarnej opisałem w poniższym artykule:

I have described the main issues of the impact of the Covid-19 pandemic on the economy and financial markets in my article below:

I have described the issue of economic globalisation as an important factor in the systemic transformation of banking in Poland in the following article:

My highly cited publication on economic globalisation:

What is your opinion on this issue?

Please answer,

I invite everyone to the discussion,

Thank you very much,

Best wishes,

I invite you to scientific cooperation,

Dariusz Prokopowicz

This question concerns the impact of technology on monetary policy decision-making. Technologies such as artificial intelligence and automation can revolutionise the way central banks forecast inflation, make interest rate decisions and monitor economic conditions. The use of such tools can improve the accuracy of decisions, but at the same time, it can also bring new challenges and risks. It is possible that the use of modern technologies, such as artificial intelligence, in monetary policy can improve the effectiveness of inflation forecasting and interest rate management, while minimising human error and increasing the speed of response to changes in the economy. Therefore, the use of technologies such as artificial intelligence in monetary policy can contribute to more precise forecasting of inflation trends and faster interest rate decisions. AI can analyse huge data sets, including macroeconomic and market data as well as information from the media, enabling central banks to respond more quickly to changes in the economy. However, there are also concerns about the independence of decisions made by machines, as well as risks associated with algorithmic errors. It is therefore necessary to understand and control the risks associated with automated decisions in such a crucial area as monetary policy, and to ensure that the technology is properly integrated with traditional methods of economic analysis.

My following articles are related to the above issues in some aspects:

I have described the key issues of opportunities and threats to the development of artificial intelligence technologies in my article below:

I have written about the sources of the high inflation that has occurred since 2021 as a result of the Covid-19 pandemic in the following article based on my research:

I have described the key aspects of the monetary policy pursued by central banks in recent years in the following article:

And what do you think about it?

What is your opinion on this issue?

Please reply,

I invite everyone to the discussion,

Thank you very much,

Best wishes,

I invite you to scientific cooperation,

Dariusz Prokopowicz

My research shows that despite their formal independence, central banks' monetary policies are often politicised, which is reflected in their involvement in anti-crisis measures. Stimulating the economy by issuing national money can bring short-term growth, but it often leads to inflation as well. Central banks are criticised for their delayed reactions to rising inflation, which worsens the situation of borrowers. In turn, tightening monetary policy makes access to credit more difficult, which slows down the economy. The belated raising of interest rates does not effectively curb inflation and deepens the slowdown, undermining the sense of further tightening the policy. In addition, governments often pursue expansionary fiscal policies, increasing public spending without proper control, which makes it difficult for central banks to control inflation. The problems of companies, especially in the SME sector, are the result of misguided economic policies, inflation and external crises such as energy crises. The costs of these mistakes are borne by society as a whole. Monetary policy, despite the formal independence of the central bank, is often used as an instrument of intervention in crises, which carries the risk of further crises. Lack of coordination with fiscal policy and delayed response to inflation have negative consequences. The balance between saving the economy and financial stability is crucial. Over-reliance on monetary policy in crises can lead to wrong decisions, the costs of which are borne by society. The independence of the central bank, transparency and responsible economic policy are important.

Therefore, despite their formal independence, central banks' monetary policies are often exposed to politicisation and used as a tool for intervention in crises, which, combined with a lack of coordination with the government's fiscal policy, leads to macroeconomic destabilisation, rising inflation, economic slowdown and the transfer of costs to society.

I have written about the sources of the high inflation that has occurred since 2021 in the wake of the Covid-19 pandemic in the following article:

I have described the key aspects of the monetary policy pursued by central banks in recent years in the following article:

What is your opinion on this issue?

Please answer,

I invite everyone to the discussion,

Thank you very much,

Best wishes,

I invite you to scientific cooperation,

Dariusz Prokopowicz

What is difference between Monetary economics and industrial economics ?

In a situation of double-digit and rising inflation, should the central bank continue to tighten monetary policy (raise interest rates) and the government also tighten fiscal policy (e.g. raise taxes and reduce non-investment spending) or should these policies be pursued differently?

Should both policies, i.e. monetary and fiscal, be conducted in a coordinated and targeted manner with the same objective, i.e. should they be focused on trying to reduce the level of inflation?

Does it make sense if, in such a situation, the central bank tightens monetary policy (raises interest rates) and the government eases fiscal policy (e.g. offers citizens further subsidies, grants, allowances, compensation, additional pensions by increasing the debt of the state finance system and/or by printing domestic money)?

I ask because this is the situation as of October 2021, in the country in which I operate. This is most likely due to the fact that the next general election is due to take place in a year's time and the current government is acting extremely populist.

What is your opinion on this?

What is your opinion on this subject?

Please reply,

I invite you all to discuss,

Thank you very much,

Greetings,

Dariusz Prokopowicz

7.9.2023 the central bank in Poland, i.e. the National Bank of Poland, despite the fact that still, despite the end of the Covid-19 pandemic more than a year ago, large amounts of additional money are being injected extra-budgetarily into the economy as part of the pre-election government social programs, inflation is still over 10 percent, average wage growth is over 10 percent, the rate of economic growth shows no signs of economic recession, the debt level of the state's public finance system is growing rapidly, oproc. of bank deposits is at a low level that does not even compensate for the level of loss of purchasing power of money, the cost of servicing the public debt is growing rapidly, the national currency is weakening reduced interest rates. by 0.75 percent. Most financial analysts, even taking into account political factors in addition to economic factors, were forecasting a reduction of these interest rates by 0.25 percent, not by 0.75 percent. Besides, this was also based on what the president of the National Bank of Poland said and declared at previous press conferences. Financial analysts economists have already become accustomed to the fact that the declarations made at press conferences by the president of this central bank are determined mainly by political factors, often diverge from the facts, contain inconsistencies with objectively conducted analyses of the macroeconomic state of the economy, and so on. The key issue is that the next parliamentary elections in Poland are scheduled for 15.10.2023. The monetary policy pursued by the central bank in Poland in recent years clearly confirms the thesis of strong informal ties between this policy and the government's economic policy. The covid and postcovid monetary policy pursued since 2020 first contributed to inflation from 2021 due to the strong easing of this policy, and then when it was tightened from October 2021 it acted mainly anti-conjunctural instead of anti-inflationary. The anti-conjunctural effect of the previously tightened monetary policy in Poland was mainly due to the fact that commercial banks operating in Poland for many years have been granting long-term mortgages and business loans at variable interest rates for more than 95 percent of the time. This is a kind of evanescence of banking in Poland compared to other developed countries. Oddly, the forecasting analyses developed at the central bank before the earlier monetary tightening apparently did not fully take into account this important economic factor. This is yet another point supporting the thesis that a highly politicized monetary policy is being pursued in Poland. This then raises the following question: won't a monetary policy conducted in this way, in which economic factors are less important than political factors, soon cause mistakes to be made again when conducting this policy and lead to another crisis in the economy? I, on the subject of monetary policy and its role in the issue of systemic credit risk management and in the context of the emergence of the global financial crisis of 2007-2009, conducted research, the results of which I have published in several scientific articles. These articles are available on my Research Gate portal profile. I invite you to join me in scientific cooperation.

In view of the above, I address the following question to the esteemed community of scientists and researchers:

Please answer,

The above text is entirely my own work written by me on the basis of my research.

In writing this text I did not use other sources or automatic text generation systems.

Copyright by Dariusz Prokopowicz

On my profile of the Research Gate portal you can find several publications on the problems of monetary policy and its role in the issue of systemic credit risk management and in the context of the emergence of the global financial crisis of 2007-2009. I invite you to scientific cooperation on this issue.

I invite you to discuss in the problematic of changes in the role of central banking in the context of financial and economic crises. In the context of the ultra-easy monetary policies applied by central banks during the recent economic and financial crises, questions arise about a possible change in the role and importance of central banking in the context of the macroeconomic stability of economies and their impact on the situation in financial markets. Particularly relevant issues of central banking, including the role of central banks in the banking and financial systems of modern countries, anti-crisis instruments of soft monetary policy used by central banks, synergistic actions of central banks using the example of the FED, ECB and NBP, mistakes made by central banks and factors generating the escalation of financial crises I described in the following publication:

Comparisons of the monetary policy of the central banks of the Federal Reserve Bank and the European Central Bank and the National Bank of Poland

I invite everyone to join the discussion,

Thank you very much,

I would like to invite you to join me in scientific cooperation,

Best regards,

Dariusz Prokopowicz

A key function of central banks in the context of their monetary policy is to take care of the value of money. In the context of increasingly frequent financial and economic crises, central banking increasingly applies other additional priorities related to the functioning of the country's economy when conducting monetary policy. Over the past few decades, mainly since the period of the oil crises of the 1970s, there has been a successive increase in the importance of the monetary policy of central banks carried out in more or less formal correlation with the socio-economic, budgetary, fiscal and social policies of the government taking into account the issues of changes in the rate of economic growth of the national economy, changes in the level of activity of the economic processes of companies and enterprises, changes in the situation in the labor markets and especially the issue of changes in the level of unemployment.

Just before the outbreak of the Great Depression of the 1930s and just before the outbreak of the global financial crisis of 2008, central banks first pursued a mild monetary policy for many years, so that when serious symptoms of an imminent financial and economic crisis appeared, resulting in a potentially high increase in unemployment and the occurrence of a recession in the economy, interest rates were raised, which then caused difficulties in servicing loans in many highly indebted companies and enterprises. Consequently, measures that were supposed to act as anti-crisis measures contributed to the accelerated development of the financial and economic crisis.

Over the past few decades of time, the importance of central banking has increased as not only the institution that shapes monetary policy, on which depends not only the value of money, but also the liquidity situation in the banking sector, the level of commercial bank lending, the scale of credit risk accepted by commercial banks in their bank lending activities and, indirectly, the economic and financial situation of many companies and enterprises that are clients of commercial banks. Therefore, also the changes made by central bank governors usually every few quarters or years in monetary policy strategies correlate to a large extent with what happens to the issue of inflation, if it is demand inflation and indirectly also the issue of monetary policy conducted can be correlated to a serious degree with important factors describing the macroeconomic situation of the economy.

The research shows that any type of monetary policy, i.e. conducted according to an anti-crisis and/or pro-development model of lax or tightened monetary policy conducted by central banking, may involve the risk of either succeeding in generating positive, pro-development effects supporting economic development or making mistakes and generating financial losses in many economic entities and leading to a financial and economic crisis. The idea is that lessons should be learned from the mistakes made at central banks in terms of the monetary policies that are carried out, that monetary policies should be realistically improved based on the conclusions of research, that financial systems should be increasingly secure, that societies should not lose public confidence in institutionalized financial systems and, thanks to this, that another major financial and economic crisis should not occur in the future.

This issue is particularly important because of the security of the entire state financial system, since the central bank, in addition to being a bank of banks and a bank of issue, is first and foremost a bank of the state that creates monetary policy and participates in the creation of money. Since the security of the financial system is largely based on public confidence in the system, including the banking system, so every bank, including the central bank, should carry out its goals and tasks with full integrity, should not engage in international financial operations with a high risk of speculative investment, and should conduct monetary policy in such a way that it does not make serious mistakes in its conduct that result in the occurrence of subsequent financial and economic crises.

I have described the key issues of the central banking problem in my articles below:

Comparisons of the monetary policy of the central banks of the Federal Reserve Bank and the European Central Bank and the National Bank of Poland

Synergy of post-2008 Anti-Crisis Policy of the Mild Monetary Policy of the Federal Reserve Bank and the European Central Bank

Analysis of the effects of post-2008 anti-crisis mild monetary policy of the Federal Reserve Bank and the European Central Bank

A safe monetary central banking policy as a significant instrument for liquidity maintenance in the financial system

ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN CENTRAL BANK IN THE CONTEXT OF THE SECURITY OF THE EUROPEAN FINANCIAL SYSTEM

Anti-crisis state intervention and created in media images of global financial crisis

In view of the above, I address the following question to the esteemed community of scholars and researchers:

What do you think about this topic?

What is your opinion on this issue?

Please answer,

I invite everyone to join the discussion,

Thank you very much,

Best regards,

Dariusz Prokopowicz

In the following link, you can see "loans to deposits ratio of EU countries"

If you look at more detailed, this ratio was nearly %140 in the EU average in 2000 year.

However this ratio has declined from the 2008 to 2019

My question is

How can we explain this ratio in the context of the post keynesian monetary theory ? Because we expect that credits are equal to the deposits in the post keynesian monetary theory.

Sincerely

Engin YILMAZ

During the recent economic and financial crises in many countries in the framework of anti-crisis measures and stimulating the rate of economic growth, in the framework of the monetary policy pursued, the formation of the money supply, the change of interest rates formally and/or informally cooperate with the government, which also in the framework of the anti-crisis programs undertaken, instruments for the activation of economic activity of companies and enterprises, the activation of consumption and investment carries out fiscal, social, budgetary, housing, etc. policies. If coordinated mild fiscal policy and mild monetary policy are appropriately synergistically applied within the framework of interventionist anti-crisis and pro-development measures, then stimulating the economic activity of firms and enterprises, stimulating consumption and investment development, reducing the development of the economic crisis can work more effectively. However, the scale of the applied anti-crisis and pro-development measures should be precisely adjusted to the sectoral and industry structure of the economy and the specifics of the macroeconomic processes being implemented, and thus should not lead to a significant and sustained increase in the indebtedness of the state's public finance system, too high a level of creditization of economic processes, too high levels of acceptable credit risk by commercial banks, a strong increase in inflation, a decline in the value of the national currency, a decline in the interest of foreign financial institutions in securities issued by the state treasury and capital companies of the country, etc. Unfortunately, during the SARS-CoV-2 (Covid-19) coronavirus pandemic, first the government in Poland applied anti-pandemic, interventionist measures, including lockdowns imposed on selected sectors of the economy thus causing a deep recession of the economy and then through further interventionist measures highly costly for the state's public finance system, financial subsidies coming from the state's public finance system limited the growth of unemployment. Another negative effect of the applied interventionist measures of the government was the rapid increase in inflation, which began as early as the 2nd quarter of 2021. This was an example of erroneously applied interventionist actions of the government on too large a scale, actions involving the application of selected instruments of state interventionism, instruments of synergistically conducted extremely mild both monetary and fiscal policies, which, as a consequence of their synergistic application, negatively affected the economic processes taking place in the Polish economy. On the other hand, some of the interventionist instruments used, due to the specially created mechanism of their operation and their high scale, may have violated the norms set forth in the Basic Law, i.e. the Constitution of the Republic of Poland. This type of interventionist measure applied on an exceptionally large scale in Poland was the purchase of Treasury bonds by the National Bank of Poland to generate additional, printed money, which was then introduced extra-budgetarily into the economy mainly in the form of non-refundable financial subsidies transferred to many companies and enterprises operating in various sectors of the economy in order to limit the growth of unemployment in a situation of deep economic crisis and economic recession generated by lockdowns. However, the government's main concern was that the unemployment rates shown by the Central Statistical Office did not change significantly despite the real decline in the level of employment, entrepreneurs changing the terms and conditions of employment of employees by, for example, reducing the duration and scale of employment of the same employees, a decline in the economic activity of companies and enterprises, a reduction in the scale of activities carried out by business entities, a reduction in the development opportunities of business entities affected by lockdowns, etc. The state interventionism thus applied during the pandemic consisted of actions and instruments of an also informally coordinated, politically politically ultra-mild monetary policy through an interventionist reduction of interest rates by the central bank and an ultra-mild fiscal policy based on the application of historically large-scale financial, non-refundable state aid. Synergistically and in a coordinated manner, the aforementioned mild monetary policy and fiscal policy applied effectively first limited the development of the economic crisis to then generate further economic problems in the economy. It is estimated that in Poland, since the 1st wave of the coronavirus pandemic, the central bank has created and transferred money to the government with a total value of almost 400 billion zlotys. On the other hand, in the framework of the economic policy unjustifiably described in the media by the government as an economic policy pursuing sustainable economic development, the opportunities that arose during the pandemic have not been used to accelerate the processes of green transformation of the economy, and this despite the fact that opportunities for this have arisen.

In view of the above, I address the following question to the esteemed community of scientists and researchers:

And what is your opinion on this topic?

In addition, I would like to add some important issues concerning central banking, monetary policy conducted by central banks, including periodic tightening and easing of monetary policy and the impact of these interventionist measures on the financial markets, the economic situation, attempts to limit the scale of financial and economic crises, and the impact of specific strategies implemented as part of the monetary policy conducted by central banks and the origins of these crises. I have described these issues in my recently published article:

What is your opinion on this issue?

Please answer,

I invite everyone to join the discussion,

Thank you very much,

Best wishes,

Dariusz Prokopowicz

Dear Researcher

Which course title is good for PhD level Students in Monetary Economics

Advanced Monetary Economics

Advanced Monetary Theory

Monetary Thoery and policy

Applied Monetary Economics

What is the best Monetary Economics textbook for Mater Level students? I am teaching the Monetary Economics to Master level students. Please suggest the best textbook of the mentioned subject.

Regards

Dr. Syed Irshad Hussain

What is the best Monetary Economics textbook for Mater Level students? I am teaching the Monetary Economics to Master level students. Please suggest the best textbook of the mentioned subject.

Regards

Dr. Syed Irshad Hussain

Have central banks started a race to raise interest rates? The attempt to fight inflation results in a slowdown in economic growth and a depreciation of the national currency. During the SARS-CoV-2 (Covid-19) coronavirus pandemic, some central banks raced to add money and inject as much added money as possible into the economy treated as anti-decessionary, anti-recessionary money for a situation of exceptional economic crisis caused indirectly by the pandemic and more directly by interventionist type measures. The crash in the financial, capital, stock and commodity markets that occurred in March 2020 and triggered a deep recession in many countries was, among other things, the result of a new crisis factor, a new concept, a new term rapidly disseminated by the media and formally established by the World Health Organisation. This new factor was the establishment of the pandemic condition as a new economic crisis factor, which generated a high level of uncertainty. As a consequence of the interventionist measures applied on a record high scale, large amounts of printed money were pumped into the economies of many countries in 2020. In this way, the economies of many countries were thrown out of relative equilibrium and put on a path of rising inflation, which occurred in 2021 and was exacerbated in 2022 by the energy crisis initiated by the war in Ukraine. For smaller economies and less economically developed economies, raising interest rates will lead to deep economic crises. In 2022, on the other hand, many central banks are successively raising interest rates, commercial banks are so far over-liquid, on the other hand credit is becoming more difficult to access, companies are holding back on new investments, wage growth is slowing, rising unemployment is imminent and possibly stagflation in 2023. This puts the economies even more out of balance, as it will be an economic crisis of 2023 that lasts much longer than the Covidian one of 2020 and is more difficult to control with government interventionist measures, as these measures are exhausting themselves in their existing formulas. Is the so-called anti-crisis economic interventionism from the covid trap now falling into the trap of rising interest rates raised by central banks? To date, interventionist measures by central banks have been treated as the 'last resort' of anti-crisis measures. Perhaps indirectly, this issue has also been highlighted by the Nobel Committee, which awarded the 2022 Nobel Prize in Economics precisely for achievements in research on the genesis of emerging banking crises and their resolution by strengthening systemic security solutions for the banking system. But this time, do the hitherto anti-inflationary measures of central banking cease to work when other factors of economic policy, including the mild fiscal policy that activates economic processes, are activated and carried out by the government as part of the so-called policy mix? Should the central bank raise interest rates faster? When applied in parallel with a tightening monetary policy, does an easing fiscal policy result in a limited anti-inflationary effect of raising interest rates by the central bank? Or are commercial banks showing excess liquidity too slow in raising deposit and deposit rates despite the fact that they are raising lending rates? Or are there other reasons for this situation?

In view of the above, I address the following question to the esteemed community of researchers and academics:

I describe this issue in much greater detail in the following recent article of mine:

I have written about the sources of the high inflation that occurred after the Covid-19 pandemic from 2021 onwards and the subsequent anti-inflationary monetary policy on the basis of the research carried out in my article below:

On the subject of benign, synchronously conducted monetary policies during the 2008-2009 global financial crisis, I have written, among others, in the following articles:

What do you think about this topic?

What is your opinion on this subject?

Please respond,

I invite you all to discuss,

Thank you very much,

Warm regards,

Dariusz Prokopowicz

According to the saying "the glass is half full or half empty", the description of certain economic processes in the government-controlled media as part of the pro-government information policy is presented in a certain way according to the needs arising from the goals of political marketing. Besides, according to the proverb and the question at the same time: "what comes first the egg or the chicken?" then the following research question can be formulated: Is it first the sluggish economic growth, the downturn in the economy within the framework of business cycles that generates the demand for the development of new strategies for the country's socio-economic development, within which certain interventionist anti-crisis instruments for stimulating economic growth are applied, including, first and foremost, the instruments of soft fiscal policy and dovish monetary policy? Or is it rather the reverse order, i.e., first a specific anti-crisis and/or pro-development, expansionary, pro-investment economic policy is applied and then a recovery in the economy occurs and sometimes an economic crisis also occurs, triggered by a misapplied, specific socio-economic development strategy of the country? Or do one and the other formula of the aforementioned causal sequences also work only alternately, i.e. usually in other periods, other consecutive years, phases of business cycles? In conducting discussions and debates on this issue, there may be different opinions, different theses and claims formulated by economists representing different camps of views on specific areas of economic policy and the legitimacy of the application and effectiveness of specific, individual instruments of fiscal, sectoral, social, etc. policies conducted by the government, as well as monetary policy conducted by the central bank. An election cycle of several years may be correlated with the country's socio-economic development strategy, anti-crisis and pro-development policies planned for several years, and perhaps also with the business cycle of several years of changes in the rate of economic growth, etc. The issue of the interventionist application of anti-crisis and pro-development economic policy instruments based on the Keynsian model of stimulating the economy through new state-funded investment and/or Milton Friedman's monetarist model proved particularly relevant during the various economic crises that occurred in the past. However, when, instead of new investments, most of the funds within the state's public finances are used for current purposes, social programs with increasing levels of debt in the system of state finances then this kind of economic policy in a few years' perspective can, after a short period of recovery of economic processes, lead to an even deeper crisis. In addition, when many new government programs of subsidies, benefits, subsidies, pensions, etc. are financed with printed money without coverage the result can be an increase in inflation and then a recession in the economy. Such a situation is currently occurring in some countries resulting in a significant decline in economic growth and an increase in unemployment in 2023. The change in public sentiment, levels of spending, consumption and labor force participation may also be influenced by citizens' awareness of the situation in the economy shaped by economic news reported in the meanstream media, which may be controlled by the government pursuing a specific economic policy and a specific information policy through political marketing and pro-government propaganda in the media. The psychology of citizens' consumer behavior influencing the decisions of entrepreneurs to change the scale of their business activities may change under the influence of government information policy shaped in the media. Analysis of current public sentiment is carried out on behalf of government agencies and the Prime Minister's Office usually through surveys and analysis of the sentiment of citizens' opinions expressed on various topics on social media websites and various discussion forums, and analyzed using analytics based on ICT information technology and Big Data Analytcs.

In view of the above, I address the following question to the esteemed community of researchers and scientists:

And what is your opinion on this subject?

What do you think about this topic?

Please answer,

I invite everyone to join the discussion,

Thank you very much,

Warm regards,

Dariusz Prokopowicz

I don't think so

I ask because this kind of financing of various government social and economic programs has prevailed since the beginning of the SARS-CoV-2 (Covid-19) coronavirus pandemic in the country where I operate. On the other hand, the indebtedness of the country's public finance system has been growing successively for many years, both in absolute terms and in relative terms expressed in terms of the ratio of budget deficit and public debt to GDP (for several years now). The country's possibility of direct purchase by the national central bank, i.e. the National Bank of Poland, of Treasury-issued government bonds and rollover Treasury bonds during the global financial crisis of 2008. At that time, monetary policy also changed regarding Poland's possible adoption of the euro single currency. Since the adoption of the euro single currency would have entailed the loss of the National Bank of Poland's key functions as a national central bank, i.e. first and foremost the functions of the state bank and the issuing bank, which functions of national monetary policy would have migrated to the European Central Bank. If this were to happen then the government would lose the key instrument of anti-crisis measures it has been using on a historically large scale since the beginning of the SARS-CoV-2 (Covid-19) Coronavirus pandemic, which is the ability to add domestic money and introduce this additional money (without coverage in manufactured products and services) into the economy through the above-mentioned mechanism of direct purchase of Treasury bonds by the central bank, i.e. the National Bank of Poland. Most of this additional money is introduced into the economy extra-budgetarily (it is not included in the annual state budget) through government-controlled public institutions, i.e. Bank Gospodarstwa Krajowego and the Polish Development Fund. Special purpose funds are created in these institutions to finance specific government anti-crisis, pro-development, social and investment programs. When, at the beginning of the SARS-CoV-2 (Covid-19) Coronavirus pandemic, the government decided to use this anti-crisis mechanism then economists independent of the government signaled that the result would be a large increase in inflation which then occurred almost from the beginning of 2021. On the other hand, the state of the country's public finances is taken into account in the development situation at the supranational rating agencies and investment banks. Recently, the cost of servicing public debt began to rise strongly in Poland. At the end of October 2022, the yield on domestic Treasury bonds offered to foreign investors rose to as high as 8-9 percent.

This means raising the financial risks associated with the fiscal policy pursued in recent years and the growing indebtedness of the state finance system.

In view of the above, I address the following question to the esteemed community of researchers and scientists:

What is your opinion on this issue?

Please answer,

I invite everyone to join the discussion,

Thank you very much,

Warm regards,

Dariusz Prokopowicz

Is it possible to have an effective anti-inflation policy in a situation where the government is pursuing a populist, short-sighted economic policy instead of a forward-looking, reliable policy of sustainable and realistically pro-social economic development?

Can this kind of policy mix based on contradictory goals and incompatible actions lead to an economic crisis under ad hoc state interventionism?

The liberalisation of the functioning of financial markets since the 1970s, the change in international exchange rate standards by moving away from the Bretton Woods monetary system and towards floating exchange rate regimes initiated changes that led to an increase in the scale of volatility and risk in financial markets. On the other hand, the rise of central banking in terms of active monetary policy-making and monetarist liberalism led to the creation of additional unbacked money as instruments for short-term activation of economic processes and interventionist anti-crisis economic policies. According to the Austrian school of economic liberalism, this kind of action can lead to an escalation of destabilising situations in the financial markets and/or to financial and economic crises. This kind of situation occurred at the beginning of the 21st century and became one of the key factors in generating the global financial crisis of 2007-2009. In some countries, a new mechanism is being used to create additional unbacked money and inject it into the economy. This involves the creation of government-controlled public institutions in which new earmarked funds are created for government support and subsidy programmes for the cost of more expensive fuels, energy, etc., subsidy programmes for selected social groups, sectors of the economy, types of economic activity and/or programmes to finance further economic ventures. Money is added by being offered by government agencies who, representing the Treasury, offer government bonds directly to the central bank, which buys them, and in this way additional money is introduced into the economy without being covered by new products and services. This is a key factor in the rise of inflation in countries where, since the SARS-CoV-2 coronavirus pandemic (Covid-19), this mechanism has been used on a historically large scale. In addition to this, public debt and the risk of destabilisation of the state's public finance system are on the rise, but in the official data provided by the government-controlled Central Statistical Office and other government think tanks, the published financial indicators do not present a complete picture of the state of the state's public finances. It happens that, in the context of a lack of ideas on how to reduce inflation and the prospect of a downturn in the economy in the coming quarters, this mechanism is the main instrument of populist economic policy of the government, for which the priority is first and foremost to win the next parliamentary elections. This is the situation in the country in which I operate and the next parliamentary and local elections are due to be held as early as 2023.

In view of the above, I address the following research question to the esteemed community of researchers and academics:

What do you think about this subject?

Please respond,

I invite you all to discuss,

Thank you very much,

Warm regards,

Dariusz Prokopowicz

In Poland, the Monetary Policy Council raised the NBP interest rates for the 11th time on 7.09.2022. This time interest rates were raised by only 0.25 per cent.

After this yet another increase, the basic reference rate of the National Bank of Poland, i.e. the central bank in Poland, at which it lends money to commercial banks, is 6.25 per cent. This relatively gentle increase in NBP interest rates results from a combination of 2 opposing factors, which the MPC takes into account. Well, on the one hand, financial market analysts operating in various financial institutions etc. are forecasting another interest rate hike, as more market and economic factors suggest a continuation of inflation growth instead of a halt. Consumer inflation in August 2022 was 16.1 per cent and is on an upward trend. On the other hand, there are increasing signs of a slowdown in economic growth projected for the next months and quarters, a downturn in the economy, including a decline in production and consumption, and an increased risk of a recession in the economy in 2023 and possibly also stagflation if unemployment levels also increase significantly. The anti-inflationary and anti-crisis monetary policy strategies pursued by individual central banks are not uniform. In some countries, including large economies such as the USA, the central bank, i.e. the Federal Reserve Bank, raises interest rates in order to limit the level of inflationary growth. In some countries, despite relatively low inflation, interest rates are raised even though the exchange rate of the national currency against other currencies is altered by the increase. Such a situation has occurred since mid-2022 in Switzerland. However, there are countries where, despite rising inflation, interest rates have been lowered by the central bank such as in Turkey. Some central banks such as the European Central Bank are only just starting to raise interest rates and are doing so to a relatively moderate extent despite rising inflation in the euro area. Rising inflation in the euro area and the increasingly tight monetary policy of other central banks has resulted in an acceleration of interest rate increases also by the European Central Bank, which on 8.9.2022 raised interest rates by 0.75 per cent to 1.25 per cent. This was the highest single increase by this central bank in history. The aforementioned different approaches of the different central banks to the issue of inflation are due to the uneven recognition of the key priorities set for the current monetary policy conducted in the context of the current economic policy of the government and the macroeconomic situation of the economy. A key issue is what types of economic and financial risks are considered particularly relevant in the context of current and possibly also forward-looking macroeconomic developments in the economy. In addition, the key issue is also what is considered more dangerous for the economy by the decision-makers, i.e. whether it is more dangerous to maintain an easing monetary policy and continue to increase inflation or whether it is more dangerous for the economy to raise the cost of money, decrease the availability of bank credit and thus exacerbate the economic downturn.

In view of the above, I address the following question to the esteemed community of researchers and academics:

What is the currently dominant strategy in terms of anti-inflationary and/or anti-crisis monetary policy pursued by central banks?

Do central banks primarily raise interest rates to curb the rise in inflation or, rather, if they do raise interest rates, do they do so slowly so as not to increase the scale of the prospective slowdown in economic growth, deepening the downturn of the economy in the following quarters and years?

I describe this issue in much greater detail in the following recent article of mine:

I have written about the sources of the high inflation that occurred after the Covid-19 pandemic from 2021 onwards and the subsequent anti-inflationary monetary policy on the basis of the research carried out in my article below:

What is your opinion on this subject?

Please reply,

I invite you all to discuss,

Thank you very much,

I would like to invite you to scientific cooperation,

Warm regards,

Dariusz Prokopowicz

The Central Statistical Office in Poland reported that food prices in Poland rose in August 2022 at the fastest rate since 1997 (in 25 years).

Inflation (consumer) in August 2022 was over 16 per cent.

Core inflation (calculated without food and energy prices) rose to around 10 per cent in August 2022. If the National Bank of Poland's anti-inflationary monetary policy continues to be ineffective and the government's soft social and fiscal policies create further pro-inflationary factors, the risk of this now double-digit inflation getting out of control is growing.

In view of the above, I address the following question to the esteemed community of researchers and academics:

What is your opinion on this topic?

Please reply,

I invite you all to discuss,

Thank you very much,

Warm regards,

Dariusz Prokopowicz

Could the larger-scale use of Central Bank Digital Currency by central banks have an impact on their monetary policies?

With central banks using Central Bank Digital Currency, will the question of the independence of these banks vis-à-vis the fiscal policies of governments increase in importance?

And what is your opinion on the subject?

What do you think?

Please reply,

I invite you all to discuss,

Thank you very much,

Warm regards,

Dariusz Prokopowicz

Is there anyone specialized in this field? I'd like to read something more about the relation between electronic money and economic growth.

All the contributions are welcome.

I am currently working on a money supply simulation and there are some pieces of the puzzle that are still missing. One of them has to do with the purchase program of the ECB.

Say I am a pension fund which is holding a government bond which the ECB wants to purchase for 1000 EUR. With the purchase program the ECB creates money to purchase this bond but that money is digital central bank money which can not be transferred to my account. My question is, where does the money that I eventually receive om my account come from? How would that look when explained with the balance sheets of me (the pension fund), my bank and the ECB?

Thanks in advance,

Stef Kuypers

Dear Researchers, Academics, Friends,

In my opinion, the monetary policy coordinated by central banks can not be objectively assessed without taking into account many specific, current determinations describing the condition of financial markets, the issues of financial risk management instruments applied, the condition of the economy and many other macroeconomic factors. The analysis of a particular monetary policy should take into account the dynamic approach of many variables, including cyclical fluctuation reflected in the changes of many economic categories on the financial markets and in the entire economy. A specific monetary policy may be interpreted and evaluated differently depending on many factors surrounding the condition, financial markets and the economy. In support of this thesis, I cite the following various situations surrounding the banking system and the condition of financial markets and the macroeconomic situation in the context of the cyclical nature of the economy:

1. The process of cyclical development of the national and global economy in a multi-annual perspective, which does not develop fully objectively and independently, is only coordinated by actively pursued economic policies in individual countries, primarily through fiscal and financial policy. To this should be added the issue of the growing importance of central banking in banking systems since the 1970s and the processes of globalization, deregulation, liberalization of transactions and the operation of financial markets, applied security instruments and credit risk management, including capital markets.

2. The impact of monetary policy on central banking on economic processes, when this policy is used, for example, to stimulate economic growth in the deep recession of the economic cycle of the entire national economy, in other words, as has been used many times in many countries since the 1970s. also after the appearance of the global financial crisis in September 2008. Initially, the Federal Reserve Bank in the USA applied such an interventionist anti-crisis solution, and then the European Central Bank in the European Union applied analogous interventionist anti-crisis programs. thanks to this, restoring the balance in the economies and restoring economic growth has worked more effectively and faster than if these interventionist anti-crisis programs were not applied.

3. Long-term, the same, analogical, similar to the same formula, the same goals and directions of action, such as monetary policy co-ordinated by a large central bank, which is also of international importance due to the importance of the US economy, ie monetary policy shaped by the Bank Federal Reserve in the USA. This has been the case since the 1990s until the global financial crisis in 2008. Consequently, this particular policy of the Federal Reserve bank before 2008 was considered by many economists to be incorrect, too low interest rates were maintained for a long time, which enabled commercial banks to broaden the liberalization of lending policy, which resulted in granting these loans to persons without creditworthiness when there were no reliable borrowers and the home sales market was growing, prices of real estate and securities on stock exchanges continued to grow speculatively, despite the fact that they were highly overvalued.

In connection with the above, in the current economic reality it is not practically justified to assess the dominant models of applied monetary policies in universal, timeless terms, detached from the specific economic conditions of a given country, from a specific moment in the business cycle, from specific standards of the institution's supervision of the financial system, on the specific quality of the effects achieved in the area of ??the security of the financial system being a derivative of the application of specific solutions and system prudential instruments in the credit risk management process, etc.

On the other hand, it is justified to make objective, scientifically verified assessments of the dominant models of applied monetary policies, but for a specific economic situation, for a given country, for a specific examined and posted financial system functioning in a specific economy, at a specific moment, phase of the economic cycle of the national economy, global situation, specific situation on the capital markets, the level of valuation of securities on stock exchanges, applicable standards and instruments for the security of the financial system, including the effectiveness of supervision institutions over the financial system, including banking, situtions on credit markets, specific scientifically tested and defined standards for the use of bank loans, i.e. level of credit risk for the majority of credit transactions, etc.

Do you agree with me on the above matter?

In the context of the above issues, I am asking you the following question:

I would like to invite you to discuss in the problems of central banking.

Particularly important issues of central banking, including the role of central banks in the banking and financial systems of modern countries I described in the following publication:

And what is your opinion on this topic?

What is your opinion on this issue?

Please feel free to respond,

I invite you all to join the discussion,

Thank you very much,

Best regards,

I would like to invite you to join me in scientific cooperation,

Dariusz Prokopowicz

Should the Federal Reserve Bank in the US be the main institution shaping and leading pro-growth active state interventionism?

In principle, YES, but it should be specified precisely the framework for a possible anti-crisis launch and implementation of the policy of active state intervention. The Federal Reserve Bank should continue to fulfill its current functions. In this respect, it is the most important institution in the US in terms of maintaining financial stability in the banking system and indirectly in the entire financial system. In addition, indirectly supports inter-branch, transactional, market, business and cross-border trade and capital flows. As the Federal Reserve advises on the issue of maintaining financial stability, it also translates into the entire US economy and also to a large extent on the entire global economy while the economy The US is recognized as a key global player. On the other hand, the Federal Reserve Bank, using its monetary policy instruments and the possibility of buying back lost commercial loans and junk securities, should focus on stabilizing the situation on the financial markets rather than on actively stimulating demand for securities, which may generate another global one in the long run. financial crisis. I examined this problem and described it in my scientific publications.

In view of the above, the current question is: Should the Federal Reserve Bank in the US be the main institution shaping and leading pro-growth active state interventionism?

Please, answer, comments.

I invite you to the discussion.

Dear Friends and Colleagues of RG,

I invite you to discussion and cooperation.

Best wishes

What is your opinion about the impact of monetary policy on the stability of financial systems in the context of the analysis of the sources of the global financial crisis in 2008?

Please reply

Best wishes

I was using the VAR model and to see the impulse response function I used Cholesky decomposition. data is quarterly from 2003q1 to 2019q2. The first variable is oil price as a supply shock, second output gap by applying Hodrick-Prescott filter, third for the monetary policy-money base, fourth nominal effective exchange rate, and fifth cpi. After the first difference, they are stationary. response of CPI to nominal effective exchange rate shock was negative, which means that there is deflation, but at the same time base money has a positive response to neer shock, which means that the national bank uses expansionary policy. and if there is deflation why use national bank expansionary policy?

some people from this site advised me to use the structural VAR model instead of the ordinary VAR model. unfortunately, I do not have experience working with it and I have a problem constructing the model correctly. can anyone help how to construct a correct matrix? my baseline= (oil, output gap, money base, Neer, CPI)

(a 0 0 0 0)

(a a 0 0 0)

(a a a 0 0 )

(0 a a a 0)

(0 a 0 a a)

I should do something like this, but I don't know if it is correct, so please help me to order variables correctly.

Silvio Gesell proposed the idea of FreeMoney, which posited that money loses value over time. As such, this can accelerate circulation, as no one would want to bear the cost of holding on to currency.

Along the same lines, in a hypothetical situation where every citizen is given a certain amount of cash in their hands, with a caveat that the money will disappear (or not be valid) after a certain time (say 48 hours), where would it ultimately flow to?

Would love to hear your opinions.

Does deepening the liberalization of the rules of conducting transactions in financial markets, banking lobbying in rating agencies, moral hazard in investment banking, failure to observe prudential procedures, neglecting the methodology of creditworthiness analysis in the process of verification of potential borrowers and violation of ethics in business can be the main factor in the next global financial crisis?

And these types of factors at the transactional and procedural level were, in addition to the mild monetary policy of central banking, indicated by economists as the key determinants of generating the global financial crisis in 2008.

Please, answer, comments.

I invite you to the discussion.

Dear Friends and Colleagues of RG,

I invite you to discussion and cooperation.

Best wishes

I am currently analysing the relationship between monetary base and Unemployment and have constructed an ARDL model. When I use the BIC to determine the optimal lag length of my independent variable (monetary base), the model that is suggested only has one lag. I have a feeling this doesn't make very much economic sense. In the model with one lag, the independent variable isn't significant.

When I include 12 lags, the 5th lag of the independent variable is significant.

I have read that with monthly data, including 12 lags is reasonable.

Could I just include more lags than are suggested by the BIC in order to get a significant variable?

Using VAR lag order selection criteria, if I put this in cointegration I receive the above error. Why?

I am currently working on an empirical analysis in R. To give you some background information: I want to estimate a VAR-model to subsequently develop IRFs from it (using cholesky decomposition). My model has five variables: an industry production index, a consumer price index, an effective exchange rate index, 10-year government yields and the monetary policy rate. The data are available on a monthly basis. Except for the last two variables , I logarithmized all variables and calculated the yearly changes (not monthly changes). The real problem is that the variables are still all non-stationary. With the monetary policy rate and the government yield (which, as I said, I haven't changed), I don't think that's so bad, but with the other three variables I'm not sure that non-stationarity will cause problems.

Does anyone here know if this could cause problems for further analysis?

Thank you very much in advance and have a great weekend!

Many prominent experts and scholars claim we are going to face both the supply and demand shock due to COVID-19 pandemic. However, since the first effect of the ongoing crisis the collateral damage (of financial assets) is, the question above seems appropriate. What do You think?

Who has coined the term “Say’s law”? Is it Keynes or is there any predecessor to him? Suppose someone has coined this term. Is it the same idea that John Baptiste Say wanted to express in his famous chapter on Débouchés?

In my opinion, classical writers like J. B. Say and David Ricardo only wanted to say that economic growth is possible against the claim that it is not. For example, Ricardo picked up this topic in Chapter 21 which has a title: Effects of Accumulation on Profits and Interest. This proves what situation Ricardo was thinking.

If my hypothesis is approved, that Say and Ricardo claimed Say's law in the meaning that John M. Keynes had given in his General Theory. It seems to me that Keynes attacked Say and Ricardo by his self-invented scarecrow.

i would like to construct a data set of/ containing a) sovereign (country) risk-free rates - likely repo rates - and b) sovereign credit ratings - the credit rating of the particular country

i would like to include as many countries as possible

and have the window period as long as possible

what would be the best source(s) to construct such a data set?

What is your opinion about the concept of helicopter money invented by Milton Friedman as an idea for one-time activation of consumption, economic activity and improvement of economic growth in a situation of economic downturn?

Milton Fredman, classic of economic liberalism, Nobel laureate, in 1969 developed a hypothetical situation of consumption activation based on the idea of ​​the concept called helicopter money.

Some central banks have modified this concept and used anti-crisis solutions, among others, in the following two variants:

1. An intervention, anti-crisis purchase of short-term tax motions to improve financial liquidity in the public finance system of the state.

2. Intervention, anti-crisis purchase of the highest level of credit risk incurred by non-regulated debt of commercial banks as part of quantitative easing programs.

Central banks in some countries have used these opportunities since 2008 in order to quickly restore liquidity in the financial system when the global financial crisis appeared, including the objective of maintaining lending of commercial banks, maintaining customer confidence in the banking system and preventing total liquidity collapse financial systems and the aim of excluding the possibility of a decline in the importance of the banking sector in modern economies.

In view of the above, in the context of preparation of new anti-crisis programs for the situation in the future of further global financial crises, the answer to the following questions is:

- Is the possibility of buying short-term government treasury bonds by the central bank an important kind of safety valve on the potential future global financial, monetary, economic, debt crises, etc.?

- In which countries did central banks use the option of buying short-term Treasury bonds, regardless of whether they benefited or failed to purchase the highest-risk non-regulated commercial banks' debt assets under the quantitative easing programs?

- In the context of the above considerations, what do you think about the concept of helicopter money invented by Milton Friedman?

I invite you to the discussion

Best wishes

Marc Lavoie's book Post-Keynesian Economics (2014) is a thick book of 650 pages and has a subtitle New Foundations. It is full of arguments on methodologies and policy orientations. I read full of criticisms against neoclassical economics (both micro and macro ones), but as far as I see in the book, few theoretical foundations are deployed. Does this mean that Post Keynesian Economics need no theoretical foundations? Or does this simply mean that Post Keynesians have not yet succeeded to build their own foundations?

Business cycles continue to last longer. They are increasingly being extended through active interventionist monetary and socio-economic policies. Implementations of large infrastructure and energy investment projects often require longer, long-term construction and implementation periods. Countries with large resources of production factors, including financial, human and technological capital can implement large investment projects in the public sector or as part of public-private partnerships. In China, for example, the modern technological metropolis Shenzen was built from scratch in China during the 30th anniversary. There are planned at least two similar large infrastructure and metropolitan projects, including a modern city, self-sufficient in crops and a significant portion of other commodities, a modern city that is to be built from scratch in a maximum of 30 years as a new technological development metropolis.

Were the countries and corporations of the highly developed Western countries able to draw inspiration from strategic management with large investment projects in the public sector that are currently implemented and designed in countries such as China?

Please, answer, comments.

I invite you to the discussion.

Best wishes,

Dariusz Prokopowicz

Hello to all of you :)

Right now I am doing an event-study and want to know whether an interest rate change was surprisingly or not. Many authors e.g. Bernake used the future rates on the interest rate as a good predictor for the market expectation and looked at the difference between these future rates and the real interest rate to see whether the change was anticipated or not. Does anyone of you have experience in this field and could tell me how I can do this sort of analysis in Bloomberg or any other data terminal? That would help me a lot.

Thanks a lot in advance!

Best regards

Raphael

I am searching for the above figure to work out the currency to bank deposit ratio... It will be really helpful if I also get country wise breakup of the figure.

No monetary autonomy, central bank cannot print money, fully dollarized economy

what is the relationship between cash-deposit ratio and money multiplier?

Are the two concepts mutually exclusive?

If inflation targets were set higher, it could mean a higher long-run policy rate.

This

countries use their foreign exchange reserves to keep the value of their currencies at a fixed rate, could be replaced with Cryptocoin 

The theory of asymmetric price adjustment has led to following implications:

1. monetary policy has larger effects on economic variables in recessions than expansions.

2. small shocks of monetary policy have larger effects on economic variables then small shocks.

3. restrictive shocks have larger effects on economic variables than loosing shocks.

However, what should be the combination of these three implications? Is it like this:

- small restrictive shocks have the largest effect on economic variables in recessions.

Do you have comments about my interpretation? 

FED has introduced two tools to drain reserves from the system: the reverse repo (RRP) and term deposit facilities (TDF) also FED drain reserves by cutting off principal reinvestment.

I don't understand second part, "FED will not sell bonds and wait mature date of the bonds".  In the date of the mature will not take the money on bonds ?

Someone said that

I dont understand this part ?

Note: You can find QE Policy representation in annex which indicate how QE affect balance sheets ?

Economics uses classical game theory (John von Neumann, Oskar Morgenstern), but there is also combinatorial game theory (Elwyn Berlekamp, John Conway), which I find potentially fruitful. Combinatorial games have been put in an auction play framework, essentially using a hybrid approach of classical and combinatorial games. In combinatorial game theory, hot and cold games could be useful, as well as thermography and sente/gote. Where is the state of the art of combinatorial games in economics?

There are two approaches for evaluating the enviromental resources: physical and monetary. Of course, they have many advantages according to themselves. but, how can we entitle as "this is best"? on the other hand, do we benefit from both of them? If we do, how?

Hi,

I am trying to examine the impact of monetary policy on net margins for 3-digit manufacturing industry using quarterly data. So basically, across rows I have quarterly data and across columns the net margins for 3-digit industry. One of the crucial reasons why SURE model is used is that since the impact of interest rates on 3-digit manufacturing industry net margins has been estimated, the error terms across the industries tend to be correlated due to the fact that the characteristics across the industries may be related. Also the RHS variables are all same across equations. 

Now there are several questions which I am having while using SURE. Some of them are as follows:

- Since its a panel data, should I run sureg or xtsur command in STATA?

- How do I account for bias introduced by lag dependent variable (net margins)

- Should I also account for industry and year fixed effects since it is a panel data model?

Thanks

The BREXIT will have an impact on the economy of the member countries in Europe and an impact on firms. What do you think about the impact?

Thanks in advance for your answers.

I am looking for a case study on how countries are managing deficit. How did these countries manage to increase their revenues and reduce costs?

Monetary Economics

For example, how to define a monetary structure of a car industry in the USA or any other country, which may consist of production of rubber, steel, glass etc. In other words, I'm interested to know how the Leontiev input-output intersectional tables are formed. Do you know any websites where such statistics is available?

Dear colleagues,

I would be very grateful if you recommend me some profound studies about how interest rates influence inflation and also share you personal opinion on this issue. Do you think there is a positive or a negative relation between these indicators or may be none at all. Thanks in advance for your answers!

Hello,

I am again in need of help and want your sincere advices on my topic.

I briefly tell what I am doing in my project. This is a project of event study methodology. I will examine the effect of monetary policy surprises of FED ( only the interest rate surprises of FOMC) on currencies with countries of different central banks with different legal objectives: Bank of Canada, Reserve Bank of Australia, ECB, Bank of England and a suitable four countries of 'Fragile Five'. I am choosing 4 central banks of developed countries together with 4 developing countries with 'fragile' economies. I will then classify these central banks in a way that whether each of them has only price stability (inflation) objective in its legal objectives or any other objectives such as growth, unemployment etc. Therefore my regression will be as follows. There will be US/XXX currency data of a short-window on the left side and at the right side, there will be Beta0 + Beta1*Surprise*Dummy1 + Beta2*Surprise*Dummy2 + Error Term where Dummy1 states whether it has price stability target and Dummy2 indicates whether it has any other targets or not.

Here are my questions, please do forgive me for my ignorance,

1) I have 8 countries for the time being and how many FOMC meetings should I consider? It is an undergraduate term project for an advanced economics theory course. Therefore, I am not after a very important and staggering work. I am just simply trying to do something nice and interesting. If I have to decrease the number of countries from my sample, due to time constraint of the project, what should be the number of data points in order to do panel data regression?

2) Is there a specific model I should perform in panel data regression which is the best for this kind of work such as DOLS and FMOLS? I am not that much familiar with panel data regression, therefore I am asking for your kind help. What would you advise for the regression part?

3) Would you advise Eviews or Stata for the regression part?

4) Which tests should I perform on my regression to detect problems. If it was a time series data, I would be able to check many things in eviews but I don't have many ideas on panel data regression for a project at this level. Therefore, I am not clear on what diagnostic tests I should perform after the regression.

Any other advises would be appreciated by me and I do very thank you for your time and effort.

My Bests, Hanifi

Empirical research shows that divisia monetary targeting is better than simple sum monetary targeting. Which of the countries is now following divisia monetary targeting? 

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Hi,

I am running a SVAR model with 3 external variables (oil prices, fed rate, global growth rate) and 6 domestic macrovariables. I want to treat the 3 external variables as exogenous in my study. What are the ways of doing it in my model?

I would be interested in studies from any discipline.

I want to know hw best to use NG PERRON in interpretation

Hello, 

We want to estimate the simultaneous equation system using GMM using the identification method proposed by Rigobon (2003). 

Summary of this method is, for rank order condition the system is under identified but he assume that the variance of error have at least two regimes. Through this assumption he estimates the required parameters using GMM.

Any body can help in this regard? If any one knows in which software this procedure is implemented or if you have code please provide us.

Thanks in advance

Irfan