IDEAS home Printed from https://ideas.repec.org/a/bla/ecaffa/v42y2022i2p288-306.html
   My bibliography  Save this article

On monetary growth and inflation in leading economies, 2021–22: Relative prices and the overall price level

Author

Listed:
  • John Greenwood
  • Steve H Hanke

Abstract

For most of the period since China started to reform and open its economy, falling goods prices in developed economies have been offset by rising service prices, but as a result of the COVID‐19 pandemic these relative price trends have been temporarily reversed. Separately from these relative price changes, the 2021–22 episode of inflation reflects broad money growth rates in many economies around the world since the start of the pandemic. The economies that are predicted to experience the greatest increase in inflation are those where monetary growth has increased most relative to the requirements to finance normal economic growth and the normal increase in demand for money balances (the inverse of income velocity).

Suggested Citation

  • John Greenwood & Steve H Hanke, 2022. "On monetary growth and inflation in leading economies, 2021–22: Relative prices and the overall price level," Economic Affairs, Wiley Blackwell, vol. 42(2), pages 288-306, June.
    • Handle: RePEc:bla:ecaffa:v:42:y:2022:i:2:p:288-306
    DOI: 10.1111/ecaf.12536
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecaf.12536
    Download Restriction: no
    File URL: https://libkey.io/10.1111/ecaf.12536?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Milton Friedman, 1961. "The Lag in Effect of Monetary Policy," Journal of Political Economy, University of Chicago Press, vol. 69(5), pages 447-447.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Christian A. Conrad, 2024. "The Impact of Inflation and a Real Interest Rate Gap on the Capital Market and Economic Development - Evidence from Two Behavioral Experiments," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(12), pages 1-15, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. KAMKOUM, Arnaud Cedric, 2023. "The Federal Reserve’s Response to the Global Financial Crisis and its Effects: An Interrupted Time-Series Analysis of the Impact of its Quantitative Easing Programs," Thesis Commons d7pvg, Center for Open Science.
    2. Q. Akram, 2010. "What horizon for targeting inflation?," Empirical Economics, Springer, vol. 39(3), pages 675-702, December.
    3. Sellin, Peter, 1998. "Monetary Policy and the Stock Market: Theory and Empirical Evidence," Working Paper Series 72, Sveriges Riksbank (Central Bank of Sweden).
    4. WenShwo Fang & Stephen Miller, 2011. "The lag in effect of inflation targeting and policy evaluation," Applied Economics Letters, Taylor & Francis Journals, vol. 18(14), pages 1371-1375.
    5. Jen-Chi Cheng & Larry Taylor & Wenlong Weng, 2010. "The links between international parity conditions and Granger causality: a study of exchange rates and prices," Applied Economics, Taylor & Francis Journals, vol. 42(27), pages 3491-3501.
    6. Pierdzioch, Christian & Rülke, Jan-Christoph & Stadtmann, Georg, 2012. "Who believes in the Taylor principle? Evidence from the Livingston survey," Economics Letters, Elsevier, vol. 117(1), pages 96-98.
    7. Nelson, Edward & Schwartz, Anna J., 2008. "The impact of Milton Friedman on modern monetary economics: Setting the record straight on Paul Krugman's "Who was Milton Friedman?"," Journal of Monetary Economics, Elsevier, vol. 55(4), pages 835-856, May.
    8. Berlemann, Michael & Hilscher, Kai, 2010. "Effective monetary policy conservatism: A comparison of 11 OECD countries," HWWI Research Papers 2-21, Hamburg Institute of International Economics (HWWI).
    9. Michael Berlemann & Kai Hielscher, 2009. "Measuring Effective Monetary Policy Conservatism," Working Paper 89/2009, Helmut Schmidt University, Hamburg.
    10. Estrella, Arturo, 2015. "The Price Puzzle And Var Identification," Macroeconomic Dynamics, Cambridge University Press, vol. 19(8), pages 1880-1887, December.
    11. Mary C. Daly, 2022. "Policy Nimbleness Through Forward Guidance," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2022(17), pages 1-07, June.
    12. Mandel, Antoine & Taghawi-Nejad, Davoud & Veetil, Vipin P., 2019. "The price effects of monetary shocks in a network economy," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 300-316.
    13. John C. Williams, 2015. "The view from here: the economic outlook and its implications for monetary policy," Speech 135, Federal Reserve Bank of San Francisco.
    14. John C. Williams, 2015. "The outlook, education, and the future of the American economy," Speech 158, Federal Reserve Bank of San Francisco.
    15. Chen, Zhengyang & Valcarcel, Victor J., 2021. "Monetary transmission in money markets: The not-so-elusive missing piece of the puzzle," Journal of Economic Dynamics and Control, Elsevier, vol. 131(C).
    16. Conrad, Christian & Hartmann, Matthias, 2014. "Cross-sectional evidence on the relation between monetary policy, macroeconomic conditions and low-frequency inflation uncertainty," Working Papers 0574, University of Heidelberg, Department of Economics.
    17. John C. Williams, 2015. "The economic outlook: live long and prosper," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    18. Nelson, Edward, 2003. "The future of monetary aggregates in monetary policy analysis," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 1029-1059, July.
    19. Anari, Ali & Kolari, James, 2016. "Dynamics of interest and inflation rates," Journal of Empirical Finance, Elsevier, vol. 39(PA), pages 129-144.
    20. Lutz, Chandler, 2015. "The impact of conventional and unconventional monetary policy on investor sentiment," Journal of Banking & Finance, Elsevier, vol. 61(C), pages 89-105.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecaffa:v:42:y:2022:i:2:p:288-306. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0265-0665 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.