tag:blogger.com,1999:blog-6297413898275266606.post6477228601762606569..comments2024-03-27T18:15:59.096+08:00Comments on Economics Malaysia: Evaluating the monetary policy stance: back of the envelope calculationshishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-6297413898275266606.post-84806458060064029452009-03-10T09:56:00.000+08:002009-03-10T09:56:00.000+08:00One of the reasons why I did this post was to demo...One of the reasons why I did this post was to demonstrate that blanket assertions that monetary expansion <I>will</I> trigger (hyper)inflation, even on the scale we're seeing today, aren't necessarily true. The converse to that, given that velocity is not constant, is that there is a real risk of overcooking the economy if and when recovery resumes. The obvious corrollary is that monetary policy hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-17903533031534850142009-03-09T23:44:00.000+08:002009-03-09T23:44:00.000+08:00hishamh,We know the Quantity Theory of Money start...hishamh,<BR/><BR/>We know the Quantity Theory of Money started as an identity and assume the role of theory when it is postulated that the velocity is constant. If the velocity is not constant, as you have shown for M3, then the theory breaks down. I have, in my experience, learnt nothing from this tautology.<BR/><BR/>Except is the business confidence is good, and banks are still unwilling to etheoristhttps://www.blogger.com/profile/03412913576145631384noreply@blogger.com