ON THE DIFFERENCE EQUATION SYSTEM OF THE COMPOSITION OF THE AMOUNT OF MONEY

Concerning its mobility money stock can be divided at least into two major groups according to the spending or saving purpose, respectively, namely, active (mobile) money really participating in the realization of circulation and inactive (idle) money laid by, withdrawn from circulation. The problem...

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Bibliographic Details
Published in:Acta oeconomica 1981-01, Vol.26 (3/4), p.335-359
Main Authors: FÉNYES, T., SÁRI, J.
Format: Article
Language:English
Subjects:
Difference equations
Economic development
Economic models
Fluid circulation
Money
Money demand
Money supply
Payments
Velocity of money
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Summary:Concerning its mobility money stock can be divided at least into two major groups according to the spending or saving purpose, respectively, namely, active (mobile) money really participating in the realization of circulation and inactive (idle) money laid by, withdrawn from circulation. The problem to be solved is to determine which share of active money will turn into inactive and vice-versa; furthermore, how long the time-lag is in this transformation. The mathematical description of these processes is a system of difference equations indicating also the effect of induced and spontaneous money movements on the supply with money of the national economy, on its sufficient or insufficient volume, on viable, and stable situations following the mobility of money and on resulting regulation possibilities. The investigation is aimed at determining how the state of equilibrium can be established in the course of financial regulation according to the model set up by the authors and how it can be maintained in the system described.
ISSN:0001-6373
1588-2659