Monetary aggregates in the US since 2020 and post-COVID-19 inflation: evidence from the equation of exchange
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Beretta, Edoardo
[1]
;
Neuberger, Doris
[2]
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[1] Universita della Svizzera italiana
Universita della Svizzera italiana
Lugano, Suiza
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[2] University of Rostock
University of Rostock
Kreisfreie Stadt Rostock, Alemania
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- Localización: Economics and Business Letters, ISSN-e 2254-4380, Vol. 12, Nº. 4, 2023, págs. 321-330
- Idioma: inglés
- Enlaces
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Resumen
Starting from Irving Fisher’s equation of exchange ( ) at the basis of the quantity theory of money, we analyze from a theoretical macroeconomic-monetary perspective whether the increase of monetary aggregates M1 and M2 might have affected general prices. Moreover, we investigate why monetary aggregates have evolved differently for COVID-19 than in the global financial crisis (2007-2009). The article elaborates on data for the US from Q1/2020 to Q2/2022 and represents the first scientific contribution to the analysis of post-COVID-19 inflation by means of the equation of exchange. We find that money growth seems to have contributed to inflation supporting the “monetarist” view, but that non-monetary drivers such as supply shocks and increasing profit margins outweigh the monetary ones.
