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Bedeutung der Einkommenskreislaufgeschwindigkeit des Geldes für die Effizienz der Geldpolitik bei festen und flexiblen Wechselkursen
Credit and Capital Markets – Kredit und Kapital, Vol. 14 (1981), Iss. 2 : pp. 180–185
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Keinath, Karl
Abstract
The Significance of the Income-Velocity of Monetary for the Efficiency of Monetary Policy with Fixed and Flexible Exchange Rates
Monetary policy is more efficient with flexible than with fixed exchange rates, since in the case of flexible exchange rates the liquidity effect is lacking and a reinforcing effect comes into play via improvement or deterioration of the balance of payments on current account. When in the course of cyclical trends the income-velocity of money exhibits fluctuations, rising during upward and declining during downward trends, it can be shown that the difference in the efficiency of monetary policy with fixed or flexible exchange rates is smaller than when the income-velocity of money is constant.