#” “monetary policy

[idiopathicsmile]

said it before and i'll say it again: i know this isn't like the deepest or most pressing reason to want universal basic income and affordable housing but i can't stop thinking about all the cool art that would exist, in every single medium, if people who enjoy making stuff didn't need to live in constant anxiety about balancing their creative projects with making rent.

i mean, it's amazing what does exist if you dig for it, but imagine if everyone who wanted to make stuff was free to spend their time and energy that way without constantly veering towards overwork-induced burnout.

i don't know, it's just a nice thought.

[tanadrin]

Dollarization is so funny. “Yeah our currency is too fucked up to function, we’re just gonna use theirs now.”

[racefortheironthrone]

When minting new coins and decreeing that coins showing the former monarch or monarchs were no longer legal tender, was it common to have an amnesty period, where anyone who had coins with the former monarch could trade them in for coins of equal value showing the new monarch? Was this ever used as a pretext to devalue currency, as changing from old to new currency in our own world often is?

Yes!

As I suggested in the previous post, the practice of "renovatio monetae" involved a fair bit of public outreach - such that the royal decree announcing one generally came with a grace period of a couple months to allow for people to make the trek to the royal mint, usually coordinated with seasonal markets and fairs.

And yes, medieval governments used the opportunity to adjust monetary policy in a number of ways. In addition to making money through seignorage by carefully constructing the difference between old coins turned in vs. new coins handed out in order to ensure that the crown would profit from a "hidden" tax, the renovatio monetae could be used to either "cry down" (devalue) the new currency or "cry [it] up" (revalue) - depending on which monetary policy approach the government wanted to take.

[allthebrazilianpolitics]

Mexico, Brazil inflation reports send contrasting monetary policy messages

Inflation figures released on Wednesday painted opposite scenarios for Latin America's two largest economies, indicating that Brazil will keep tightening its monetary policy to combat rising prices while Mexico brings its interest rate down.

The annual headline inflation figures in the two countries did not differ that much from each other, but their price trends diverged and should keep monetary policy in the emerging country peers moving in different directions.

In Brazil, annual inflation accelerated in September to 4.42%, in line with market expectations but above the 4.24% reported in the previous month, closing in on the upper limit of the central bank's target range.

Policymakers in the country have vowed to bring inflation back to their 3% target, which has a tolerance margin of plus or minus 1.5 percentage points, meaning they will likely hike interest rates again at their next meeting in November.

The rate-setting committee, known as Copom, had already voted unanimously to embark on a tightening cycle last month, raising borrowing costs by 25 basis points to 10.75% amid inflationary pressures and strong economic activity.

"September's inflation figures will only add to the hawkish mood at the central bank as Copom seeks to shore up its credibility amid concerns about the politicization of monetary policy," Capital Economics economist Jason Tuvey said.

Higher electricity and food prices amid a major drought have weighed on Brazil's inflation index.

In Mexico, meanwhile, 12-month headline inflation slowed to 4.58% in September from 4.99% in the previous month, still well above the 3% target but maintaining a downward trend that has allowed the Bank of Mexico (Banxico) to lower borrowing costs.

Policymakers in Latin America's second-largest economy delivered rate cuts three times this year, including a 25-basis-point reduction last month that brought the benchmark rate down to 10.50%.

"This is a good inflation report and supports the case for further monetary policy easing," Pantheon Macroeconomics' Andres Abadia said. "Underlying inflation pressures continue to ease, and we expect a continued decline in inflation during Q4."

Continue reading.

[workersolidarity]

*closes my eyes and taps my shoes together*

The US Dollar is still the dominant reserve currency

The US Dollar is still the dominant reserve currency

The US Dollar is still the dominant reserve currency

[barthel]

In The Super Mario Bros. Movie (2023), Mario passes by a group of Toads clearly laboring by hitting coin blocks with their heads to farm coins, raising all sorts of troubling questions about the Mushroom Kingdom’s monetary policy

[kingoftheu]

Help my post-Canon TOH fic is turning into a discussion of financial and monetary policy.

[liyawritesss]

America would rather implode before admitting its wrongdoings, first and foremost

[aneldrichentity]

So I’m taking ap macroeconomics this year and so far it’s been pretty chill, I kinda hate it but that’s life. But this unit we got to monetary policy. And that’s when I discovered- monetary policy theory is BROKEN. IT STOPPED WORKING A DECADE AGO AND NO ONE KNOWS WHY. WHY DID NO ONE TELL ME ABOUT THIS.

THE GOVERNMENT STARTED PRINTING MONEY AND IT DIDNT RAISE INFLATION. THATS NOT HOW FUCKING INFLATION IS SUPPOSED TO WORK LOOK AT ZIMBABWE AND GERMANY CIRCA 1930’S!!!

THEY DECREASED THE MONEY SUPPLY AND INFLATION INCREASED I DONT KNOW IF YOU UNDERSTAND HOW NO SUPPOSED TO HAPPEN THAT IS.

AT THIS POINT THE US GOVERNMENT SHOULD PRINT MONEY TO PAY OF THEIR DEBT BECAUSE IF PRINTING MONEY DOESNT CAUSE INFLATION ANYMORE SCREW THE RULES JUST SEE WHAT HAPPENS IDFK

[cb-reblog]

[jdsquared]

Kiddushin 12a

[racefortheironthrone]

Is there really any difference between the government spending money into circulation rather than lending to private banks?

How would the former allow the government to capture seigniorage rents?

Well, MMT would argue they are essentially the same thing, except that in the latter the government is outsourcing the spending decision-making to the finance sector. They do differ in that lending provides additional liquidity to banks and other financial institutions, and gives the government some income from interest.

As to how "the former allow the government to capture seigniorage rents," essentially the government makes money from the difference between the cost of producing the money and the value of the money. Moreover, when the government spends money into circulation as opposed to lending it into circulation, it also gets the stuff it's spending the money on (and usually at a discount), whether that's goods or services (or labor in general).

[allthebrazilianpolitics]

Brazil's rate-cutting cycle set to end as prices rise more than expected in May

Consumer prices in Brazil accelerated more than expected in May, data from statistics agency IBGE showed on Tuesday, with a jump in food costs helping drive annual inflation further away from the central bank's target.

The data put the monetary authority's ongoing easing cycle at risk, economists say, with investors pricing in a pause in the rate-cutting process when policymakers meet again later this month.

Prices as measured by Brazil's benchmark IPCA index rose 0.46% last month, above market forecast of 0.42%, according to a Reuters poll of economists, up from the 0.38% increase in April.

Meanwhile, 12-month inflation in Latin America's largest economy hit 3.93%, up from 3.69% in the previous month and above the expected 3.89%.

Continue reading.

[sarpedon]

im literally obsessed w money its so funny. not with earning it or having it just with like the history and development of it. a couple terms ago i had the opportunity to research any topic in all of classical antiquity for a seminar presentation and i looked at harbour taxes.

[moreconomics]

"The Austrian School of Economics: A Solution to the World's Problems?"

The Austrian School of economics is a heterodox economic theory that emphasizes the role of individual subjective value, entrepreneurship, and the importance of markets in the allocation of resources. It is distinguished from other economic schools by its emphasis on the dynamic and entrepreneurial nature of economic activity, and its view that the economy is constantly evolving and adapting to changing circumstances. The Austrian School is also characterized by its commitment to methodological individualism, which is the idea that social phenomena can only be understood by examining the actions and motivations of individual actors. This emphasis on the subjective experiences and preferences of individual actors is also reflected in the Austrian School's commitment to the subjective theory of value, which holds that the value of a good or service is subjective and determined by the individual valuations of those who exchange it.

One key aspect of the Austrian School is the concept of the business cycle, which refers to the regular fluctuations in economic activity that occur over time. According to the Austrian theory of the business cycle, these fluctuations are caused by the expansion and contraction of credit by banks. When banks expand credit, they make it easier for individuals and businesses to borrow money, which can lead to an increase in investment and economic activity. However, this expansion of credit can also lead to an unsustainable increase in the demand for goods and services, which can result in a misallocation of resources and the emergence of malinvestments. When the credit expansion eventually comes to an end, the demand for goods and services can suddenly drop, leading to a contraction in economic activity and a corresponding drop in the supply of money and credit. This process of credit expansion and contraction can lead to the regular fluctuations in economic activity that are characteristic of the business cycle.

One important concept in the Austrian School of economics is that of economic calculation, which refers to the process by which individuals and businesses make decisions about how to allocate their resources in the face of scarcity. According to the Austrian School, market processes are the most efficient means of economic calculation because they allow individuals to make decisions based on their own subjective preferences and valuations, and provide information about the relative scarcity of different goods and services through the system of prices. When prices are allowed to adjust freely in response to changes in supply and demand, they provide a clear and accurate signal about the relative scarcity of different goods and services. This allows individuals to make informed decisions about how to allocate their resources and optimize their utility.

For example, if one good is experiencing a shortage and its price is higher than another good that is not experiencing a shortage, an individual may choose to purchase the good that is not experiencing a shortage even if they prefer the good that is in short supply. This is because the higher price of the good in short supply reflects its relative scarcity and the individual may be able to obtain more utility by purchasing a greater quantity of the good that is not experiencing a shortage. This process of resource allocation through market prices promotes the most efficient use of resources and contributes to economic growth and prosperity.

The Austrian School argues that subsidies and other forms of market intervention can distort prices and undermine the ability of the market to perform this crucial role in resource allocation. By distorting prices, subsidies can create artificial shortages or surpluses of goods and services, leading to misallocations of resources and inefficiencies in the economy. This can ultimately undermine the ability of the market to promote economic growth and prosperity.

Money is just another good among many in an economy, and like any other good, it is subject to the laws of supply and demand. When the supply of money is increased or decreased, this can have a significant impact on the relative prices of other goods and services in the economy, as well as on the level of economic activity. The Austrian School of economics argues that the state's control of money and its regulation of private alternatives can distort market processes and undermine economic prosperity. By monopolizing the supply of money or over-regulating private alternatives, the state can manipulate the money supply and interfere with the proper functioning of the market. This can lead to misallocations of resources, economic inefficiencies, and ultimately, a lower standard of living for individuals and businesses.

One way to promote economic stability and prosperity is through the denationalization of money, a concept posited by Friedrich Hayek and embraced by many Austrian economists. This idea refers to the proposal that money should be privately produced rather than issued by a central government or bank. The Austrian School argues that private money would be more stable and less subject to manipulation by governments and central banks, and would therefore be more effective at promoting economic stability and prosperity. One way in which private money could be implemented is through the concept of free banking, in which banks are free to issue their own private currencies while also subject to no special regulations beyond those applicable to most enterprises.

Free banking is a monetary system that has the potential to promote greater competition among banks, leading to better quality currencies and a more stable financial system. In a free banking system, banks have an incentive to issue currencies that are widely accepted and maintain their value, as this would increase the demand for their currency and their profits. To achieve this, banks must demonstrate the reliability and trustworthiness of their currency to the public. One way that banks can do this is through a practice called "note-dueling."

Note-dueling is a practice that occurs in a free banking system, in which banks attempt to gather up as much of their rivals' outstanding notes as possible in order to demonstrate the strength of their own currency. This process can be thought of as a form of market discipline, as it incentivizes banks to maintain reasonable reserve ratios in order to be able to honor their promise to redeem their notes for gold or other specie when requested. Competition among note issuers led each bank to try to demonstrate how solid and reliable it was relative to other banks, and this competition effectively regulated the specie reserves held in the banking system. If a bank has a large specie reserve relative to its outstanding note issue, it is better able to honor this promise and maintain the confidence of the public in its currency. On the other hand, if a bank has a small specie reserve relative to its outstanding note issue, it may be at risk of facing a liquidity problem if there is a high demand for note redemption. In this case, the bank may not have enough gold on hand to meet the demand, which could lead to a failure in the bank that did not have enough specie reserve relative to its outstanding note issue.

The Cantillon effect is a phenomenon in economics that refers to the way in which changes in the money supply can have unequal impacts on different parts of the economy. Named after the 18th-century economist Richard Cantillon, the effect suggests that the first recipients of new money tend to benefit the most, while those who receive the new money later on tend to be disadvantaged. This is because the first recipients of new money are able to use it to purchase goods and services before prices have had a chance to adjust to the increased demand, which can lead to higher prices for these goods and services. This can lead to a transfer of wealth from those who receive the new money later on to those who receive it earlier, contributing to economic inequality.

Many Austrian economists advocate for the denationalization of money and the implementation of free banking as a way to mitigate the potential for the Cantillon effect and promote economic stability and prosperity. In a system of free banking, banks are free to issue their own private currencies and compete with one another for customers. This competition can help to ensure that the supply of money and credit is more responsive to market forces and less subject to manipulation by governments and central banks. One aspect of this competition is the process of "note dueling," in which banks attempt to gather up as much of the outstanding note issue of their rivals as possible in order to demonstrate their own reliability and stability. By allowing the market to play a greater role in the supply and demand of money, the Austrian School argues that free banking can help to promote economic stability and reduce the potential for the Cantillon effect to contribute to economic inequality.

In conclusion, the Austrian School of economics offers a unique perspective on economic theory and policy that emphasizes the role of individual subjective value, entrepreneurship, and the importance of markets in the allocation of resources. The theory of the business cycle explains how the expansion and contraction of credit by banks can lead to fluctuations in economic activity, and the concept of denationalization of money proposes that money should be privately produced rather than controlled by the state. The idea of free banking, in which banks are free to issue their own private currencies, is one way in which this concept could be implemented. The Austrian School argues that these ideas have the potential to promote economic stability and prosperity by allowing the supply of money and credit to be more responsive to market forces and less subject to manipulation by governments and central banks. By respecting the role of the individual and the market in the allocation of resources, the Austrian School offers a unique and valuable perspective on economic policy.

[newsusapacific]

Great financial tip! How does the repo rate help control inflation? -2022

The Repo rate, also known as the overnight lending rate, is the rate at which central banks lend money to commercial banks in the event that they need to borrow funds to meet their reserve requirements. When the central bank increases the repo rate, it becomes more expensive for commercial banks to borrow money, which can help to reduce inflation. Read More