tag:blogger.com,1999:blog-2098432983500045934.post1783956750189711639..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: Big VThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2098432983500045934.post-10913696479793740962011-10-24T21:00:19.445-04:002011-10-24T21:00:19.445-04:00As Milton Friedman wrote: "what happens to th...As Milton Friedman wrote: "what happens to the quantity of money tends to dwarf what happens to output" [Money Mischief, Chapter 8]The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-56714130262199952622011-10-24T20:55:19.877-04:002011-10-24T20:55:19.877-04:00"...if I look at the effects of increasing th..."...if I look at the effects of increasing the money supply it seems to have had a positive impact on GDP in the past."<br /><br />Fair enough. Oddly, that did not occur to me during the writing. But the effect of Quantitative Easing on the Velocity ratio is immediate, direct, and certain. The effect of QE on output and prices is gradual, indirect, and uncertain.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-49614643548767259752011-10-24T15:39:02.714-04:002011-10-24T15:39:02.714-04:00Art,
You wrote:
I should point out that if there ...Art,<br />You wrote: <br />I should point out that if there is any difference between the red uptrends and the blue downtrends, that difference must be because of the changes in GDP (the green line)<br /><br />Well, I'm not sure, but if I look at the effects of increasing the money supply it seems to have had a positive impact on GDP in the past. In the latest trend at the end of your graphs it shows a major negative impact on GDP. Not sure why, but I'm wondering if it has something to do with interest rates and paying interest on excess reserves.<br /><br />I'm still digesting the rest of your excellent explanation of the relationship between the variables.nanutenoreply@blogger.com