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Financial intermediation and control of the level of prices

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  • Fama, Eugene

    (University of Chicago)

Abstract

As money and deposits are not complete substitutes for all transactions, the simplified financial systems are used to control the level of prices, which is a sufficient condition for control of the money supply. An important factor is that the management of the money supply that controls the level of prices does not include financial intermediation. Thus, the problem of regulating the level of prices has never been compared with the availability of credit to finance real business activity.

Suggested Citation

  • Fama, Eugene, 2013. "Financial intermediation and control of the level of prices," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 161-185, December.
    • Handle: RePEc:rnp:ecopol:ep1363
    as

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    References listed on IDEAS

    as
    1. Fama, Eugene F & Schwert, G William, 1979. "Inflation, Interest, and Relative Prices," The Journal of Business, University of Chicago Press, vol. 52(2), pages 183-209, April.
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    3. James Tobin, 1963. "Commercial Banks as Creators of 'Money'," Cowles Foundation Discussion Papers 159, Cowles Foundation for Research in Economics, Yale University.
    4. Barro, Robert J, 1979. "Money and the Price Level under the Gold Standard," Economic Journal, Royal Economic Society, vol. 89(353), pages 13-33, March.
    5. Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
    6. Klein, Benjamin, 1974. "The Competitive Supply of Money," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(4), pages 423-453, November.
    7. Fama, Eugene F. & Gibbons, Michael R., 1982. "Inflation, real returns and capital investment," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 297-323.
    8. Fama, Eugene F, 1982. "Inflation, Output, and Money," The Journal of Business, University of Chicago Press, vol. 55(2), pages 201-231, April.
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    Full references (including those not matched with items on IDEAS)

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