An elementary model of money circulation

Vladimir N. Pokrovskii and Christophe Schinckus

Physica A: Statistical Mechanics and its Applications, 2016, vol. 463, issue C, 111-122

Abstract: This paper investigates money circulation for a system, consisting of a production system, the government, a central bank, commercial banks and many customers of the commercial banks. A set of equations for the system is written; the theory determines the main features of interaction between production and money circulation. Investigation of the equations in a steady-state situation reveals some relationship among output of the production system and monetary variables. The relation of quantity theory of money is confirmed, whereas a new concept of the efficiency of the system is introduced.

Keywords: Bank system; Efficiency of bank system; Money circulation; Quantitive Quantity theory of money; Bank credit; Endogenous money (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:463:y:2016:i:c:p:111-122

DOI: 10.1016/j.physa.2016.07.006

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