Forex reserves supply should be matched by domestic money supply to counter inflation.
If NFA grows, the monetary base will grow
If NFA falls, the monetary base will fall
That is how a currency board system should work.
The local monetary policy is tied to an anchor currency.
If NFA grows, the monetary base will grow
If NFA falls, the monetary base will fall
That is how a currency board system should work.
The local monetary policy is tied to an anchor currency.
The monetary base has two components
NFA Net Foreign Assets
NDA Net Domestic Assets
NDA +NFA = Monetary Base
NFA Net Foreign Assets
NDA Net Domestic Assets
NDA +NFA = Monetary Base
What #Turkey needs is to #peg its currency to an anchor currency.
#Currency Peg can be fixed or crawling.
They can follow many examples, with or w/o capital #controls.
It can choose from an expansive list that includes Malaysia, Nigeria, Argentina, Hong Kong or those in the GCC.
#Currency Peg can be fixed or crawling.
They can follow many examples, with or w/o capital #controls.
It can choose from an expansive list that includes Malaysia, Nigeria, Argentina, Hong Kong or those in the GCC.
So does #Lebanon.
It needs a currency board system to control exchange rate volatility and inflation.
The multiple exchange rate regime has not helped that nation.
It has lead to misallocation and utilization of financial resources.
It needs a currency board system to control exchange rate volatility and inflation.
The multiple exchange rate regime has not helped that nation.
It has lead to misallocation and utilization of financial resources.
imf.org/external/pubs/…
Read this paper.
It presents a retrospective perspective of how currency boards performed with and without capital controls in different countries up to 1988.
Read this paper.
It presents a retrospective perspective of how currency boards performed with and without capital controls in different countries up to 1988.
#Malaysian Model of a #Peg and Capital Controls was decried by top global economists such as @paulkrugman & Late Robert Mundell (the God Father of the #EMU & the founder of #OCA Optimum Currency Area Theory)
#Mundell admonished @chedetofficial not to flirt with the real exch rate
#Mundell admonished @chedetofficial not to flirt with the real exch rate
Late both @paulkrugman and Mundell apologized if I remember correctly.
They admitted their mistake and lauded DR M for imposing capital controls and adopting the fixed exchange rate regime.
Malaysian Economy never stopped growing after that,or did it?
Positivist Economics slapped
They admitted their mistake and lauded DR M for imposing capital controls and adopting the fixed exchange rate regime.
Malaysian Economy never stopped growing after that,or did it?
Positivist Economics slapped
I am all for Entrepreneurial Enterprises, Free Enterprise, Free Market Economics, and the Individual's ascendancy over the government, etc, blah blah...
Having said that, we can't accept all proof writings thrust down our throats by Right Leaning Mathematical Economics
Having said that, we can't accept all proof writings thrust down our throats by Right Leaning Mathematical Economics
The chap who understood Paul Samuelson was Paul Samuelson.
Not even Math Graduates were able to decipher the wasted logic behind his mathematical models, done often like running commentaries in a sporting contest.
Converting societal variables into maths is politics, not science
Not even Math Graduates were able to decipher the wasted logic behind his mathematical models, done often like running commentaries in a sporting contest.
Converting societal variables into maths is politics, not science
What about #Edgeworth #Box Matrix Politics?
How fascists such as Vilfredo Pareto (who was probably living in a cloud Cuoco land) came up with the model of free markets operating with agents, where everybody assumable got better off w/o making the other worse.
Crackpot economics
How fascists such as Vilfredo Pareto (who was probably living in a cloud Cuoco land) came up with the model of free markets operating with agents, where everybody assumable got better off w/o making the other worse.
Crackpot economics
Actually, what we saw in the Western World after WW2 came to an end was a consensus that the Paretian Model of Welfare Economics, was correct.
Redistributive measures were akin to therapeutic treatments.
Here, the doctors of the welfare state capitalist model were economists.
Redistributive measures were akin to therapeutic treatments.
Here, the doctors of the welfare state capitalist model were economists.
The West fought the #Nazis but didn't disapprove of their economic intellectual traditions.
The Western intellectual tradition which has come to dominate the western economic and political thought processes is firmly embedded in Nazism.
Populism & Narrow Nationalisms are examples
The Western intellectual tradition which has come to dominate the western economic and political thought processes is firmly embedded in Nazism.
Populism & Narrow Nationalisms are examples
The Great #Schism was caused due to differences in preferences over the use of language in religion.
In #economics, it is the same!
The language of #maths in economics is causing the new schism.
In #economics, it is the same!
The language of #maths in economics is causing the new schism.
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