Is money supply endogenous determine?
Is money supply endogenous determine?
Post Keynesians posit that money supply in a market oriented production economy is endogenous or endogenously determined (rather than exogenous as claimed by Monetarists). Money supply is said to be endogenous if it is determined within the economic system itself.
Is inflation exogenous or endogenous?
For example, an economist might build a model to explain why inflation rates differ over time and across countries based on changes in money supply growth. In this model the inflation rate is the endogenous variable and money supply growth in the exogenous variable.
Is money supply endogenous or exogenous?
endogenous
The supply of money is considered endogenous in this view as it is determined by firms’ need to pay for the costs of production. The production decisions of companies generate the demand for loans (Moore, 1988).
What is exogenous money?
If its existence and quantity are determined by the economy alone, money is considered endogenous. Conversely, if the existence and quantity of money are determined by forces outside the economy—most often by the state—money is considered exogenous.
What is exogenous money creation?
Exogenous money creation, based on the money multiplier, is not a money creation process. Rather, it is a monetary policy model, but in it money is still created endogenously: bank loans (and foreign asset accumulation by banks) concurrently create new bank deposits (money).
What does exogenous mean in economics?
An exogenous variable is a variable that exists outside of the economic model. Factors outside of the economic model determine the value of exogenous variables. Variables within the economic model don’t affect exogenous variables, meaning exogenous variables are similar to independent variables.
Why is money exogenous?
Is money supply exogenous or endogenous?
