Abstract:Whether endogenous generated excess money supply can contribute to financial crises is investigated from the perspective of the Quantity Theory of Money (QTM) and endogenous money, namely Horizontalism, Structuralism, and Modern Money Theory. The correlation between money supply and output identifies countries that are neutral about the creation of extra liquid assets and countries that can be a potential trigger for excessive money supply volatility. Monitoring the dynamics of M3 and GDP shows that before the… Show more
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