The Monetary Contraction of 2008/09: Assessing UK Money Supply Measures in Light of the Financial Crisis

26 Pages Posted: 12 Jun 2009 Last revised: 20 Apr 2010

See all articles by Anthony J. Evans

Anthony J. Evans

ESCP Business School

Toby Baxendale

affiliation not provided to SSRN

Date Written: March 30, 2010

Abstract

Following the 2008/09 financial crisis renewed attention has been given to the ability of central banks to effectively monitor the quantity of money in circulation. We present a new definition of the money supply called “Austrian money supply” (MA) and apply it to the UK economy. Unlike conventional measures this suggests that the UK suffered a monetary contraction in from July 2008 until July 2009. We find further evidence that MA provides a constructive interpretation of broader macroeconomic activity and warrants attention from academics and policymakers.

Keywords: asset bubble, credit creation, liquidity, monetary policy, money supply

JEL Classification: B53, E41, E51, E52

Suggested Citation

Evans, Anthony J. and Baxendale, Toby, The Monetary Contraction of 2008/09: Assessing UK Money Supply Measures in Light of the Financial Crisis (March 30, 2010). Available at SSRN: https://ssrn.com/abstract=1416922 or http://dx.doi.org/10.2139/ssrn.1416922

Anthony J. Evans (Contact Author)

ESCP Business School ( email )

537 FINCHLEY ROAD
LONDON, NW37BG
United Kingdom

Toby Baxendale

affiliation not provided to SSRN

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