The Divisia monetary indicator and the money supply definition

Source: Cobden Centre
by Dr. Frank Shostak

“By most commentators, since the early 1980s, correlations between various definitions of money and national income have broken down. The reason for this breakdown, it is held, is financial deregulation that made the demand for money unstable. Because of financial deregulation the nature of financial markets has changed; consequently, past definitions of money no longer hold. As a result, it is held the usefulness of money as a predictor of economic events has significantly diminished.” (11/22/21)