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“Show me the money” – or how the institutional aspects of monetary policy implementation render money supply endogenous



The paper presents a historical account of the evolution of modern financial systems. It is argued that money supply had been exogenous for the most part of history, but the demise of gold standard and the development of central banking have rendered it endogenous. The analysis is supported by a review of the monetary policy implementation framework of the National Bank of Poland. Causality test results show that the degree of the banking system’s liquidity did not Granger-cause credit expansion in the decade 1998–2008.

Suggested Citation

  • Juliusz Jabłecki, 2010. "“Show me the money” – or how the institutional aspects of monetary policy implementation render money supply endogenous," Bank i Kredyt, Narodowy Bank Polski, vol. 41(3), pages 35-82.
  • Handle: RePEc:nbp:nbpbik:v:41:y:2010:i:3:p:35-82
    Note: The paper is based on the M.A. thesis supervised by prof. Zbigniew Hockuba and defended at the Faculty of Economic Sciences, Warsaw University. I would like to thank the colleagues and mentors whose work and ideas have greatly influenced my thinking on these issues and without the help of whom this paper could not have been written, especially Adam Kot, Michał Brzoza-Brzezina, Marek Rozkrut, Witold Grostal and Piotr Szpunar. I would also like to thank two anonymous referees for their comments which helped significantly improve the paper. Needless to say, none of them is responsible for any remaining errors.

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    More about this item


    money; money endogeneity; money multiplier; monetary policy implementation;

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative


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