Money Supply Endogeneity: Evidence from the Dynamic Panel Data
In the discussion on monetary economics in general and the supply of money in an economy in particular, one cannot avoid mentioning one major concept, i.e. the money supply endogeneity. Money supply is said to be endogenous or endogenously determined if money creation occurs within the monetary s...
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| Main Authors: | , , , |
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| Format: | Article |
| Published: |
Springer
2016
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| Online Access: | http://repo.uum.edu.my/24684/ |
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| Summary: | In the discussion on monetary economics in general and the supply of
money in an economy in particular, one cannot avoid mentioning one major
concept, i.e. the money supply endogeneity. Money supply is said to be endogenous
or endogenously determined if money creation occurs within the monetary system
of an economy - rather than being determined by external forces. The theory of
endogenous money represents the foundation of post-Keynesian monetary theory.
Money supply endogeneity implies that central banks do not exogenously determine
the quantity of credit money in existence; it is the interest rate that they can
control exogenously. The present paper examines the money supply endogeneity
based on a panel data set of 174 countries from year 2001 to 2011 utilising the
dynamic panel data analysis and has found that money supply is endogenous as
proposed by post-Keynesian theorists. |
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