Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Four kinds of three monies (December 2000) Table 8.1

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Table 8.2 Currency substitution* in Central/Eastern Europe (1993) Source: Sahay and Végh (1995) *Ratio of foreign currency deposits to broad money

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Assets of some central banks, mid year 2000 (bn euros) Table 8.3 Source: IMF

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Table 8.4 Elasticities of real money demand short run = adjustment within one quarter, long run=complete adjustment

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Table 8.5 Inflation and money growth in the long run (Rule of thumb*) *Assuming real money demand grows at 3% p.a.

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Prices of IKEA mirrors across Europe, 1998 US$ Table 8.6Source: Haskel and Wolf (1999)

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Table 8.7 Cost of cash inventory (€):

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.1 Foreign assets Loans to comm. banks Claims on governments Reserves of commercial banks Bank notes held by nonbanks Deposits of government Net worth Deposits of private sector Deposits of government Real assets, incl. net worth of banking sector Government and private debt Net worth Vault cash and reserves at Central Bank Loans and securities Liabilities to Central Bank Deposits of private sector Net worth Bank notes held by nonbanks Central Bank Consolidated Government and Nonbank Private Sector Commercial Banks Assets Liabilities Assets Liabilities Assets Liabilities Where’s M1?

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.2 (a) Narrow and wide monetary aggregates, France (% of GDP)

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.2 (b) Narrow and wide monetary aggregates, Germany (% of GDP)

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.2 (c) Narrow and wide monetary aggregates, UK (% of GDP)

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.2 (d) Narrow and wide monetary aggregates, USA (% of GDP)

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.3 Money demand and prices (assuming no real GDP growth) Time (a) Zero inflation(b) Constant inflation(c) Rising inflation  P/P=0  P/P>0  P/P P P P M M M M/P 000

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.4 Equilibrium in the money market Real money stock Nominal interest rate 0

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.5 Expansionary monetary policy Real money stock Nominal interest rate 0 A A´

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.6 Increase in real economic activity Real money stock Nominal interest rate 0 A A´

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.7 Decline in transaction costs Real money stock Nominal interest rate 0 A A´

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.8 Money market disequilibrium Real money stock Nominal interest rate 0 A A´ B CC´

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Money, inflation and the nominal exchange rate in the long run: OECD countries, 1970 to present Figure 8.9

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.10 Money and long-run growth Real money stock Nominal interest rate 0 A A´ B

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Nominal interest rates, UK and the Netherlands Figure 8.11

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Money demand and hyperinflation in Russia Figure 8.12

Burda & Wyplosz Macroeconomics 3 rd edn OXFORD UNIVERSITY PRESS Figure 8.13 Trips to the bank and average money holdings t=1t=0 t=1t=0 t=1t=0 t=1t=0 one trip two trips three trips four trips