Introduction with Professor Tim Congdon
Professor Tim Congdon, the founder of the Institute of International Monetary Research, discusses the link between money and national income, and explains the website.
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The chart above shows the average annual % change in quantity of money, broadly-defined, and nominal national income in the various countries, 1981-2018.
The relation between changes in the amount of money and changes in nominal income is quite evident in the data, and it does hold in very different economies all across the world. This is one of the fundamental relations in monetary economics we use in our analysis of monetary policy and financial regulation and their expected effects on the economy.
“Extremely interesting and promising programme. (It) will contribute to bringing back ‘money’ into the field of research and central banking.”
By Otmar Issing, Former Chief Economist and Member of the Board of the European Central Bank.
The purpose of the Institute of International Monetary Research is to demonstrate and bring to public attention the strong relationship between the quantity of money on the one hand, and the levels of national income and expenditure on the other.
The Institute is heavily involved in the analysis of banking systems, particularly their role in the creation of new money balances. The relationships between money and national income/expenditure hold in all countries over long periods, and the Institute’s research covers many countries. The “quantity theory of money” could be characterized as an “always-and-everywhere theory”.
The Institute – which is associated with the University of Buckingham in England – was set up in 2014, in the aftermath of the Great Financial Crisis (a.k.a., “the Great Recession”) of 2007 – 2009. It is an educational charity.
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