American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Monetary Aggregates and Output
American Economic Review
vol. 90,
no. 5, December 2000
(pp. 1125–1135)
Abstract
We ask whether the following observations may result from endogenously determined fluctuations in the money multiplier rather than a causal influence of money on output: (i) M1 is positively correlated with real output; (ii) the money multiplier and deposit-to-currency ratio are positively correlated with output; (iii) the price level is negatively correlated with output; (iv) the correlation of M1 with contemporaneous prices is substantially weaker than the correlation of M1 with real output; (v) correlations among real variables are essentially unchanged under different monetary-policy regimes; and (vi) real money balances are smoother than money-demand equations would predict.Citation
Freeman, Scott, and Finn E. Kydland. 2000. "Monetary Aggregates and Output." American Economic Review, 90 (5): 1125–1135. DOI: 10.1257/aer.90.5.1125JEL Classification
- E32 Business Fluctuations; Cycles
- E51 Money Supply; Credit; Money Multipliers