Monetary Policy Frameworks to Cope with the Vulnerability of Small States. Anthony Birchwood Presented at Conference “Sustaining Development in Small States in a Turbulent Global Economy”, July 6-7, 2009, Commonwealth Secretariat, London. Introduction.
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Presented at Conference “Sustaining Development in Small States in a Turbulent Global Economy”, July 6-7, 2009, Commonwealth Secretariat, London.
Instability triggered by financial innovations, changes in financial composition and fiscal expenditures.
Lack of predictable relationship between money supply and commercial bank reserves.Money Multiplier for fixed exchange rate Countries
Narrow money supply was not a consistent predictor of inflation across countries.
It was a predictor only across a minority of countries.Causal Relationship between Inflation and Growth of M1 for the period 1988-2008.
Greater empirical regularity with respect to broad money supply been a predictor of inflation, compared to M1.Causal Relationship between Inflation and Growth of M2 for the period 1988-2008.