World Inflation, World Money Supply and Monetary Control
Empirical analyses of world inflation have tended, by and large, to test for (a) correlation between monetary growth and the rate of inflation; and (b) the direction of causality between the two variables. However, neither the world money stock nor the world rate of inflation, as uniquely measurable constructs, are free of underlying ambiguities. The conceptual and measurement problems which they give rise to are the subject matter of this chapter. Then we go on to examine the empirical relationship between the growth of world money supply and the rate of world inflation. The later sections of the chapter discuss the problems of monetary control and their ability to cope with worldwide inflationary trends.
KeywordsMonetary Policy Central Bank Money Supply International Reserve Monetary Aggregate
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- 40.See Karl Popper, Conjectures and Refutation, Harper & Row, New York, 1963.Google Scholar