MONEY MULTIPLIER IMPACT ON INFLATION IN REPUBLIC OF SERBIA

Dušan Perović, Marina Đorđević

DOI Number
10.22190/FUEO1701031P
First page
031
Last page
041

Abstract


The essential research intention in this paper is oriented toward considering the nature of money multipliers and their impact on inflation in Republic of Serbia. The analysis of research data includes data during period of 1997-2015 in order to achieve more effective results. Obtained results, after implementing adequate statistical procedures, emphasize the existence of negative and significant correlation between money multiplier m3 and inflation. Since M3 represents basis for forming m3 multiplier, this implicates that wider range of assets in monetary aggregate M3 have greater impact on inflation than other two monetary aggregates. Therefore, one of tasks for central banks should be higher control of M3 through m3 money multiplier analysis in order to prevent higher fluctuations in inflation rate.


Keywords

Money multiplier, core inflation, m1, m2, m3, monetary base, central bank

Full Text:

PDF

References


Adam, C., Kessy, P. (2010). Assessing the stability and predictability of the money multiplier in the EAC: The case of Tanzania. London: International Growth Centre.

Benes, J., Kumhof, M. (2012). The Chicago pland revisited (IMF Working Paper, 12), Washington: IMF.

Dabrowski, M. (2016). Interaction Between Monetary Policy and Bank Regulation: Lessons for ECB. Case Networks Studies & Analysis, 480, 5-30.

Darbha, H. (2000). Testing for long-run stability – an application to money multiplier in India. New Delhi: National Institute of Public Finance and Policy.

Downes, P., Moore, W. & Jackson, D. (2006). Financial Liberalization and the Stationary of Money Multiplier. International Economic Journal, 20, 227-260.

Đurović – Todorović, J., Đorđević, M. (2010). Monetarna ekonomija [Monetary Economy]. Niš: Ekonomski fakultet.

Fischer, S. (1993). The role of macroeconomic factors in growth (Working Paper, 4565), Cambridge: National Bureau of Economic Reserach.

Hossain, A. (1993). The Money Supply Multiplier in Bangladesh. Bangladesh Development Studies, 21(4), 37-64.

Ilda, Y. (2005). Declines in the Money Multiplier Due to Continuous Deflation Expectation. Economic Analysis, 177, 70-74.

Keister, T., McAndrews, J. (2009). Why are banks holding so many excess reserves? New York: Federal Reserve Bank.

Khan, M. (2009). Testing of Money Multiplier Model for Pakistan: Does Monetary Base Carry Any Information? Economic analysis, 9(2), 1-20.

Kožetinac, G. (2009). Uloga novca u koncipiranju monetarne politike savremenih centralnih banaka [The Role of Money in Creation of of Modern Monetary Policy of Central Banks]. Međunarodni problemi, 4, 560-578.

Maravić, J., Kvrgić, G. & Vujadin, P. (2009). Calculation of Core Inflation in Serbia. Bankarstvo, 11-12, 90-119.

Mcleay, M., Radla, A. & Thomas, R. (2014). Money Creation in Modern Economy. Bank of England Quarterly Bulletin, 54(1), 14-27.

Mishkin, F. (2004). The Economics of Money, Banking and Financial Markets. Boston: Pearson.

NBS (2016). Statistical Bulletin – July. Belgrade: NBS.

Polister, R., Gottschling, A. (1999). Stability issues in German money multiplier forecasts. Frankfurt: Deutsche Bundesbank.

Rusuhuzwa, T.K., Irankunda, J. (2011). Assessing the Stability of Money Multiplier in Rwanda. BNR Economic Review, 5, 41-55.

Saatcioglu, C. (2006). Stability of Money Multipliers: Evidence From Turkey. Journal of Business & Economics Research, 4(10), 31-42.

Zhang, J., Ruan, J. (2013). The Influence of Electronic Currency Upon Money Multiplier by Empirical Analysis. Management & Engineering, 13, 51-56.




DOI: https://doi.org/10.22190/FUEO1701031P

Refbacks

  • There are currently no refbacks.


ISSN 0354-4699 (Print)

ISSN 2406-050X (Online)