A more recent but allied literature suggested the following: how close an economy is to the technological frontier and whether its institutions facilitate convergence to that frontier are vital considerations.5 In effect, a laggard country gains by implementing (or jumping to) frontier technologies.6] But an economy near the frontier – or with an appetite to define that frontier – should increasingly favour innovation over imitation.
It is in the end result of too much money chasing too few goods. Therefore, we have formulated a reference value for the growth of a broad monetary aggregate, M3, of 4 ½% on an annual basis. Growth of the money stock at this pace would provide the economy with sufficient liquidity for growth in activity in line with trend growth, without inflation.