Can digital currency control inflation
Publish: 2021-04-28 14:24:49
1. 1. Its quantity is too small compared with the currency in circulation; 2. digital currency is generally not used to buy goods. So digital money will not inflate.
2. No, it can be said that 100% is a fraud. In fact, even bitcoin countries are not allowed to trade at present. It's better to speculate in stocks than to have that money
3. Inflation is the price rise that causes the devaluation of a country's currency. The essential difference between inflation and general price rise: general price rise refers to the temporary, partial and reversible price rise of a certain commodity e to the imbalance of supply and demand, which will not cause currency devaluation; Inflation is a sustained, universal and irreversible rise in the prices of major domestic commodities that can cause the devaluation of a country's currency. The direct cause of inflation is that the amount of money in circulation in a country is greater than its effective economic aggregate
deflation is deflation: when the amount of money in circulation in the market decreases, the people's money income decreases, and the purchasing power decreases, which affects the prices and causes deflation. The long-term monetary tightening will restrain investment and proction, lead to the rise of unemployment rate and economic recession
these two are inflation and deflation respectively.
deflation is deflation: when the amount of money in circulation in the market decreases, the people's money income decreases, and the purchasing power decreases, which affects the prices and causes deflation. The long-term monetary tightening will restrain investment and proction, lead to the rise of unemployment rate and economic recession
these two are inflation and deflation respectively.
4.
Digital currency is a kind of legal tender, which must be issued by the central bank. Both digital gold coin and cryptocurrency belong to digital currency, which is not a network virtual currency, because it is not limited to virtual space, but is often used for real goods and services transactions, such as bitcoin, Wright coin, bitstock, etc. at present, there are thousands of digital currencies issued around the world
extended data:
1. Impact on financial infrastructure
the decentralized mechanism of value exchange based on distributed ledger technology has changed the basic settings of gross and net settlement on which financial market infrastructure depends. The use of distributed ledgers also poses challenges to trading, clearing and settlement, as it promotes the disintermediation of traditional service providers in different markets and infrastructures. These changes may have potential impacts on market infrastructure other than retail payment systems, such as large payment systems, securities settlement systems or trading databases
If digital currency and distributed ledger based technology are widely used, it will bring challenges to the intermediary role of financial system participants, especially banks. As a financial intermediary, banks perform the ties of acting supervisors and supervise borrowers on behalf of depositors. Usually, banks also carry out liquidity and maturity conversion business to realize the financing from depositors to borrowers. If digital currency and distributed ledger are widely used, any subsequent disintermediation may have an impact on savings or credit evaluation mechanisms5. Huang Mitong said that Yesi is that if there is less money in circulation in the market, his price will rise, because it is the principle of economics that the rare is the most expensive.
6.
The role of digital currency:
1. First of all, the central bank's digital currency can provide a huge data base for monetary policy and macro Prudential policy, so that the regulatory authorities can collect real-time trading books of different frequency and different institutions according to their needs, and it is complete and real. This information advantage can help the central bank use policy tools more accurately and flexibly
Secondly, the central bank's digital currency technology can track the flow of funds and help the regulatory authorities to comprehensively monitor and assess financial risks. Finally, the central bank's digital money technology is concive to the transmission of interest rate of monetary policy. Digital currency technology supports "point-to-point" payment and settlement, which can improve the liquidity of market participants. Only the digital currency of the central bank, which is generally accepted by the whole society, can radiate this advantage to the participants of different financial markets, so as to improve the liquidity of financial markets. This will make the term structure of interest rate smoother and the transmission mechanism of interest rate smoother
extended data:
digital currency can be considered as a virtual currency based on node network and digital encryption algorithm. The core characteristics of digital currency are mainly reflected in three aspects: because it comes from some open algorithms, digital currency has no issuing subject, so no one or institution can control its issuing; Because the number of algorithm solutions is fixed, the total amount of digital currency is fixed, which fundamentally eliminates the possibility of inflation caused by the overuse of virtual currency; Because the transaction process needs the approval of each node in the network, the transaction process of digital currency is safe enough
7. When the base money supply is fixed, if the interest rate is raised, the money multiplier will decrease, the M2 supply of broad money will decrease, the value of unit money will increase, the amount of capital flowing from the market to banks will increase, the borrowing cost will increase, the investment will decrease, and the inflation rate will decrease
8. 1 Control requirements
one of the basic reasons for inflation is that aggregate demand exceeds aggregate supply. Therefore, the first thing to control inflation is to control demand and implement tightening policy. Austerity policy is the traditional means to deal with inflation in various countries, and it is the most widely used and effective policy measure so far. Its main contents include tightening fiscal policy, tightening monetary policy, tightening income policy and so on
1. Tight fiscal policy. Tight fiscal policy is mainly to control inflation by recing fiscal expenditure and increasing taxes. The purpose of recing fiscal expenditure is to rece the government's demand by limiting expenditure, so as to rece the total demand. The main measures are: recing the national capital construction and investment expenditure, limiting the investment in public utilities, recing the expenditure of government departments, recing social welfare expenditure and so on. The main purpose of tax increase is to increase the tax revenue of enterprises and indivials. After tax increase, the income of enterprises and indivials will decrease, thus recing the level of investment and consumption< 2. Tight monetary policy. Tight monetary policy is also known as "tightening monetary policy". The direct cause of inflation is excessive money supply. Therefore, to rece the inflation rate, the central bank can rece the money supply in circulation. The specific measures include:
(1) selling government bonds through open market business, withdrawing money and recing the stock in the economic system
(2) increase interest rates, such as rediscount rate, discount rate, statutory deposit reserve ratio, bank deposit rate, etc. The rise of interest rate urges people to save more money, which reces the consumption demand. The rise of interest rate makes the investment cost rise, which also inhibits the investment demand
3. Tight income policy. The tightening income policy is an effective way to deal with the cost pushing inflation. Its main content is to take compulsory measures to restrict the increase of wages and monopoly profits, restrain the increase of costs, so as to control the rise of prices. Specifically, it includes the following contents:
(1) wage control. There are four main ways of wage control. First, moral advice and guidance. That is to say, the government formulates a guiding line for wage growth, which can be used as a reference for enterprises. However, the government can only exhort and advise, not directly intervene. Second, it should be settled through consultation. That is to make the trade union and the enterprise reach an agreement on the issue of wages under the intervention of the government. Third, wage tax. Special taxes will be levied on enterprises with excessive wage increases. Fourth, freeze wages. That is to say, the government should fix the wage or growth rate of the whole society compulsorily and not increase it arbitrarily< (2) profit control. It means that the government takes compulsory measures to restrict the profits of enterprises that may make huge profits. The methods of profit control include controlling profit rate and imposing higher income tax on excess profits. In addition, some countries also restrict monopoly profits by enacting some laws and regulations, and directly impose price control on public utility procts< (2) increasing supply
the reason for inflation is that the total demand of society is greater than the total supply. To control inflation, on the one hand, we should rece the total demand through tightening policies, on the other hand, we should increase the total supply. The main measures are: tax rection to improve the working willingness and labor proctivity of workers, increase the investment desire of enterprises, so as to drive the increase of total supply; Rece the government's restrictions on enterprises, so that enterprises can better expand the supply of goods; Enterprises are encouraged to adopt new technologies, update equipment and adjust instrial structure< (3) adjust the economic structure
as one of the reasons for inflation is the imbalance of economic structure, one of the solutions to control inflation is to adjust the economic structure and maintain a certain proportion among various instrial sectors, so as to avoid the structural imbalance of supply and demand of certain procts such as grain and raw materials, which will push up prices< (4) other anti inflation measures
1. This kind of measure is mainly adopted by some less developed countries. Its main contents include: compulsory suspension of some construction projects, rectification of market circulation, monopoly of some commodities, supply of consumer goods with tickets, etc
2. Maintain low-speed economic growth. As the rapid economic growth is often accompanied by inflation, in recent years, governments are faced with two choices; Or maintain a higher economic growth rate, but at the same time maintain a higher inflation rate; Or rece the speed of economic growth, or even the economic recession to lower the inflation rate. Many developed countries tend to choose the latter.
one of the basic reasons for inflation is that aggregate demand exceeds aggregate supply. Therefore, the first thing to control inflation is to control demand and implement tightening policy. Austerity policy is the traditional means to deal with inflation in various countries, and it is the most widely used and effective policy measure so far. Its main contents include tightening fiscal policy, tightening monetary policy, tightening income policy and so on
1. Tight fiscal policy. Tight fiscal policy is mainly to control inflation by recing fiscal expenditure and increasing taxes. The purpose of recing fiscal expenditure is to rece the government's demand by limiting expenditure, so as to rece the total demand. The main measures are: recing the national capital construction and investment expenditure, limiting the investment in public utilities, recing the expenditure of government departments, recing social welfare expenditure and so on. The main purpose of tax increase is to increase the tax revenue of enterprises and indivials. After tax increase, the income of enterprises and indivials will decrease, thus recing the level of investment and consumption< 2. Tight monetary policy. Tight monetary policy is also known as "tightening monetary policy". The direct cause of inflation is excessive money supply. Therefore, to rece the inflation rate, the central bank can rece the money supply in circulation. The specific measures include:
(1) selling government bonds through open market business, withdrawing money and recing the stock in the economic system
(2) increase interest rates, such as rediscount rate, discount rate, statutory deposit reserve ratio, bank deposit rate, etc. The rise of interest rate urges people to save more money, which reces the consumption demand. The rise of interest rate makes the investment cost rise, which also inhibits the investment demand
3. Tight income policy. The tightening income policy is an effective way to deal with the cost pushing inflation. Its main content is to take compulsory measures to restrict the increase of wages and monopoly profits, restrain the increase of costs, so as to control the rise of prices. Specifically, it includes the following contents:
(1) wage control. There are four main ways of wage control. First, moral advice and guidance. That is to say, the government formulates a guiding line for wage growth, which can be used as a reference for enterprises. However, the government can only exhort and advise, not directly intervene. Second, it should be settled through consultation. That is to make the trade union and the enterprise reach an agreement on the issue of wages under the intervention of the government. Third, wage tax. Special taxes will be levied on enterprises with excessive wage increases. Fourth, freeze wages. That is to say, the government should fix the wage or growth rate of the whole society compulsorily and not increase it arbitrarily< (2) profit control. It means that the government takes compulsory measures to restrict the profits of enterprises that may make huge profits. The methods of profit control include controlling profit rate and imposing higher income tax on excess profits. In addition, some countries also restrict monopoly profits by enacting some laws and regulations, and directly impose price control on public utility procts< (2) increasing supply
the reason for inflation is that the total demand of society is greater than the total supply. To control inflation, on the one hand, we should rece the total demand through tightening policies, on the other hand, we should increase the total supply. The main measures are: tax rection to improve the working willingness and labor proctivity of workers, increase the investment desire of enterprises, so as to drive the increase of total supply; Rece the government's restrictions on enterprises, so that enterprises can better expand the supply of goods; Enterprises are encouraged to adopt new technologies, update equipment and adjust instrial structure< (3) adjust the economic structure
as one of the reasons for inflation is the imbalance of economic structure, one of the solutions to control inflation is to adjust the economic structure and maintain a certain proportion among various instrial sectors, so as to avoid the structural imbalance of supply and demand of certain procts such as grain and raw materials, which will push up prices< (4) other anti inflation measures
1. This kind of measure is mainly adopted by some less developed countries. Its main contents include: compulsory suspension of some construction projects, rectification of market circulation, monopoly of some commodities, supply of consumer goods with tickets, etc
2. Maintain low-speed economic growth. As the rapid economic growth is often accompanied by inflation, in recent years, governments are faced with two choices; Or maintain a higher economic growth rate, but at the same time maintain a higher inflation rate; Or rece the speed of economic growth, or even the economic recession to lower the inflation rate. Many developed countries tend to choose the latter.
9. Inflation is a kind of currency phenomenon, which refers to the phenomenon of currency devaluation caused by the amount of money issued exceeding the amount of money actually needed in circulation. Inflation and price rise are different economic categories, but they are related to each other. The most direct result of inflation is price rise
the inflation rate is the ratio of the excess amount of money to the actual amount of money needed to reflect the degree of inflation and currency depreciation; The price index is a relative number reflecting the trend and degree of price change
in economics, the inflation rate is the rising range of the average price level (subject to inflation). If the size of the balloon is the price level, the inflation rate is the inflation rate of the balloon. In other words, the rate of inflation is the rate of decline in the purchasing power of money
in practice, inflation is not calculated directly or possibly, but indirectly expressed by the growth rate of price index. Since consumer price reflects the final price of commodities formed through various links of circulation, it most comprehensively reflects the demand of commodity circulation for money. Therefore, consumer price index is the price index that can fully and comprehensively reflect the inflation rate. At present, the consumer price index (CPI) is basically used to reflect the degree of inflation in the world
national central banks, such as the Federal Reserve, can strongly influence the inflation rate by setting interest rates and other monetary policies. High interest rates (and sluggish growth of capital demand) are typical anti inflation measures of the central bank to rece employment and proction to curb price rise< However, central banks in different countries have different views on controlling inflation. For example, some central banks pay close attention to symmetrical inflation targets, while others only control inflation when the inflation rate is too high. The European Central Bank has been blamed for adopting the latter in the face of high unemployment
monetarists focus on raising interest rates through financial policies to rece capital supply. Keynesians focus on increasing taxes or recing government spending to rece demand generally. Part of its explanation of financial policy comes from Robert
the inflation rate is the ratio of the excess amount of money to the actual amount of money needed to reflect the degree of inflation and currency depreciation; The price index is a relative number reflecting the trend and degree of price change
in economics, the inflation rate is the rising range of the average price level (subject to inflation). If the size of the balloon is the price level, the inflation rate is the inflation rate of the balloon. In other words, the rate of inflation is the rate of decline in the purchasing power of money
in practice, inflation is not calculated directly or possibly, but indirectly expressed by the growth rate of price index. Since consumer price reflects the final price of commodities formed through various links of circulation, it most comprehensively reflects the demand of commodity circulation for money. Therefore, consumer price index is the price index that can fully and comprehensively reflect the inflation rate. At present, the consumer price index (CPI) is basically used to reflect the degree of inflation in the world
national central banks, such as the Federal Reserve, can strongly influence the inflation rate by setting interest rates and other monetary policies. High interest rates (and sluggish growth of capital demand) are typical anti inflation measures of the central bank to rece employment and proction to curb price rise< However, central banks in different countries have different views on controlling inflation. For example, some central banks pay close attention to symmetrical inflation targets, while others only control inflation when the inflation rate is too high. The European Central Bank has been blamed for adopting the latter in the face of high unemployment
monetarists focus on raising interest rates through financial policies to rece capital supply. Keynesians focus on increasing taxes or recing government spending to rece demand generally. Part of its explanation of financial policy comes from Robert
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