Traditional Culture Encyclopedia - Traditional festivals - What is the growth rate of money?
What is the growth rate of money?
The calculation method of money supply growth rate is also called "M=Y+P formula". In order to replace the outdated "1: 8 formula", people hope to find a simple and easy-to-measure formula.
Among them, the most influential are:
M=Y+P
That is, the growth rate of money supply m is equal to the economic growth rate y plus the expected (or planned) price increase rate p.
If this formula is concretized, it is:
Among them:
RMS stands for the growth rate of money supply;
RE stands for real economic growth rate;
RP stands for the rate of price increase;
RV stands for the changing range of money circulation speed.
Evaluation of calculation method of money supply growth rate
Extended data:
Related:
This formula, like "1: 8", aims to solve the problem of how to determine the annual growth rate of planned money supply, but it is obviously different from "1: 8" in many aspects:
1. Although some people defined m as the growth rate of cash issuance at first, many people have defined m as the growth rate of broad money or loans in the course of use, which is different from the fact that "1: 8" only refers to cash.
2. No matter which index is used to represent the economic growth rate, it is much broader than the traditional "1: 8" index of total social retail commodities.
3. The expected or planned rate of price change enters the model, which actually recognizes the influence of price rise on nominal money demand. Whether it is reasonable or not, the opinions of theoretical circles are still not unified.
Baidu Encyclopedia-Money Growth Rate
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