Monetary aggregates in the US since 2020 and post-COVID-19 inflation: evidence from the equation of exchange

Authors

  • Edoardo Beretta Università della Svizzera italiana (USI), Institute of Economics (IdEP), Lugano (Switzerland) /// Franklin University Switzerland (FUS), Department of Economics and Finance, Lugano-Sorengo (Switzerland) https://orcid.org/0000-0002-2196-455X
  • Doris Neuberger University of Rostock

DOI:

https://doi.org/10.17811/ebl.12.4.2023.321-330

Keywords:

COVID-19, inflation, Irving Fisher’s equation of exchange, macroeconomics, velocity of money

Abstract

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.

Author Biography

Edoardo Beretta, Università della Svizzera italiana (USI), Institute of Economics (IdEP), Lugano (Switzerland) /// Franklin University Switzerland (FUS), Department of Economics and Finance, Lugano-Sorengo (Switzerland)

An Adjunct Professor, the Director of examinations of the Faculty of Economics, a member of the Scientific Directorate and Program Manager of the Lugano part of the Master in Economia e Politiche Internazionali (MEPIN), a member of the Scientific Board of the Bachelor in Economics and Lecturer of the course "Macroeconomia internazionale" as well as previously Adjunct Professor at Franklin University Switzerland (FUS) in Lugano-Sorengo, Prof. Edoardo Beretta's research focus lies on international macroeconomics. In this specific regard he has analyzed selected aspects like the German external/war debt problem in historical perspective, the debate on the international monetary order as well as past and current reform proposals of the international payments system and exchange-rate regimes. He also holds two PhDs in Economics - the first one (Dr. sc. ec.) from USI while the second one (Dr. rer. pol.) from the Universität Duisburg-Essen (Germany). He conducted his further graduate studies at the Università Commerciale L. Bocconi, USI and the Catholic University of the Sacred Heart. The German nation and its economic literature represent a significant source of inspiration to overcome the recent global crisis and also lead his research work. He has also focused his attention on the Euro Area as conceived today as well as on contemporaneous decisions in terms of economic policies like restrictions on payments in cash. A member of the Reviewer Board of the 'Journal of Risk and Financial Symmetry' as well as of that of 'Symmetry', he has also participated (as a speaker and a guest) in several scientific conferences and/or seminars organized by the following institutions (in alphabetical order): Banco de Portugal; Banco de la Repùblica; Bank for International Settlements; Centro Studi Villa Negroni; Deutsche Bundesbank; Deutsches Institut für Wirtschaftsforschung (DIW); Deutsch-Italienisches Zentrum für Europäische Exzellenz „Villa Vigoni“; EMEA - The Cash Cycle Seminar (ICCOS); European Central Bank; Freie Universität Berlin; Istituto di studi economici e per l’occupazione (I.S.E.O.); Journal of Monetary Economics; Study Center Gerzensee; Swiss National Bank; Technische Universität Dresden; Università della Svizzera italiana (USI); Universidade de Lisboa; Universität Duisburg-Essen; Universität Liechtenstein; Universität Münster; Universität Trier; Universität Zürich; Université de Bourgogne; Université de Lausanne; Université de Picardie Jules Verne.

He is also bilingual (Italian-German), has passed the German State Exam for Translators obtaining the title of "Staatlich geprüfter Übersetzer" and has been awarded the renowned Großes Deutsches Sprachdiplom (GDS) conferred by Goethe-Institut and Ludwig-Maximilians-Universität zu München (Germany).

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Published

15-12-2023

How to Cite

Beretta, E., & Neuberger, D. (2023). Monetary aggregates in the US since 2020 and post-COVID-19 inflation: evidence from the equation of exchange. Economics and Business Letters, 12(4), 321–330. https://doi.org/10.17811/ebl.12.4.2023.321-330

Issue

Vol. 12 No. 4 (2023): December

Section

Articles

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