Quantity of Money and Inflation. Part 1. General Considerations

July 7, 2024Posted inmacroeconomicsNo Comments

We have found that the correlation relationships between various types of credit and inflation are variable over time.  The same is true for the M2 money supply.  The sources of credit studied are government deficit spending,1,6 consumer credit,2 mortgage debt,3 nonfinancial corporate credit,4 and financial sector debt.5   The correlation between the M2 money supply and inflation was reported here.7  The measure of inflation for these studies was the Consumer Price Index (CPI).8  In this and subsequent posts, we will review the results of previous studies. The objectives will be to understand the quantity of money vs. inflation correlation studies’ potential limitations and rank the observed correlations for possible importance.


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M2 Money Supply and CPI Inflation. Part 4

June 30, 2024Posted inmacroeconomicsNo Comments

This article concludes the analysis of the correlation patterns between the M2 Money Supply and Consumer Inflation (CPI).  The last of the three types of inflation patterns (time periods with no significant inflation trends) is the subject of analysis here.  The other two types of patterns (inflation surges1 and disinflation/deflation surges2) were analyzed previously.  The conclusion discusses the correlation patterns for all time periods, looks for any common threads, and identifies important differences across time periods and types of correlation patterns.


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M2 Money Supply and CPI Inflation. Part 3

June 16, 2024Posted inmacroeconomicsNo Comments

The full data sets for the 64 years from 1959 to 2022 show no discernable association patterns (correlations) for M2 money supply growth and consumer inflation changes.1  This post continues that analysis by looking specifically at the various regimes of inflation change during the 64-year timeline. This article analyzes the association of CPI with M2 during the four periods from 1959 to 2022 with negative inflation changes (disinflation/deflation) surges.


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June 2024 Economic Forecast: Our Index Marginally Weakened And There Is Another Indicator Warning Of A Recession

May 29, 2024Posted ineconomics, economy, macroeconomicsNo Comments

Authored by Steven Hansen

EconCurrent‘s Economic Index marginally declined but remained slightly in positive territory. The economy remains very stratified where some sectors are going gangbusters, other sectors are barely above recessionary levels, whilst others are in recession territory. A fourth potential major index is now likely indicating a recession is coming.  Read on to understand the currents affecting our economic growth.

M2 Money Supply and CPI Inflation. Part 1

May 26, 2024Posted inmacroeconomicsNo Comments

We have found that the correlation relationships between various types of credit and inflation are variable over time.  So far, the kinds of credit studied are government deficit spending,1,6 consumer credit,2 mortgage debt,3 nonfinancial corporate credit,4 and financial sector debt.5 Here, we examine the relationship between the total money supply (M2) and Consumer Price Index (CPI) inflation.7


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Comparing Two Data Organizations for Federal Deficit Spending vs Inflation. Part 2

May 12, 2024Posted inmacroeconomicsNo Comments

Two studies have been performed on the correlations between U.S. Federal Deficit Spending and CPI Inflation. The first used federal deficits for fiscal years between 1914 and 2022. The second study used the quarterly data available for federal deficit spending starting in 1966.  This article is the second to compare the results of the two studies.


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Comparing Two Data Organizations for Federal Deficit Spending vs Inflation. Part 1

May 5, 2024Posted inmacroeconomicsNo Comments

Two studies have been performed on the correlations between U.S. Federal Deficit Spending and CPI Inflation. The first used federal deficits for fiscal years between 1914 and 2022. The second study used the quarterly data available for federal deficit spending starting in 1966.  This article compares the results of the two studies.


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Federal Deficit Spending (Quarterly) and Inflation. Part 4

April 28, 2024Posted inmacroeconomicsNo Comments

This article concludes the analysis of the correlation patterns between quarterly Federal Deficit Spending (FDS) and Consumer Inflation (CPI).  The last of the three types of inflation patterns (time periods with no significant inflation trends) is the subject of analysis here.  The other two types of patterns (inflation surges1 and disinflation/deflation surges2) were analyzed previously.  The conclusion discusses the correlation patterns for all time periods, looks for any common threads, and identifies important differences across time periods and types of correlation patterns.


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Federal Deficit Spending (Quarterly) and Inflation. Part 3

April 21, 2024Posted inmacroeconomics2 Comments

The full data sets for the 56 years from 1966 to 2022 show no discernable association patterns (correlations) for federal deficit spending (FDS) and inflation changes.1  Thus, we started an analysis by looking specifically at the various regimes of inflation change during the 56-year timeline.  The most recent post2 analyzed the seven time periods over 56 years with positive inflation surges.  This article analyzes the association between CPI changes and FDS changes during the four periods from 1966 to 2022 with negative inflation (disinflation/deflation) surges.


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