Monetary Theory: Inflation, Interest, and Growth in the World Economy

adjustment assumed assumption balance of payments capital stock cash balances central bank chapter commodity cost of holding countries credit expansion currency deficit financing deflation demand for money devaluation disequilibrium domestic assets effect equation excess demand excess supply exchange rate expectations Figure function given rate gold exchange standard gold price growth rate hoarding holding money implies income increase inflation rate intersection investment level of real lower monetary expansion money rate money supply money-capital ratio nominal nominal interest rate output payments deficit percent point Q position price level price of gold productivity of capital quantity of money rate of growth rate of inflation rate of interest rate of monetary real balances real interest rate real money balances real rate real value reduced reserve ratio rise seigniorage shift slope stocks and flows theory U.S. balance velocity wealth wealth effect world economy zero