Advanced Search
MyIDEAS: Login to save this article or follow this journal

Are money growth and inflation still related?


Author Info

  • Gerald P. Dwyer, Jr.
  • R.W. Hafer


Despite the long history and the substantial evidence supporting the conclusion that persistent changes in the price level are associated with changes in the money supply, the predicted association remains dis-puted. Is it debated because the empirical relationship holds over time periods so long that it may be uninformative for practitioners and policymakers, who are more concerned about inflation next month or next year? If it takes a generation for the relationship between money growth and inflation to become apparent, it would not be surprising that central bankers and practitioners put little weight on recent money growth. ; It is not clear, though, that it takes a generation. The authors of this article reconsider the link between money growth and inflation, using two types of evidence. The first, based on the behavior of five countries' price levels and money stocks over much of the twentieth century, provides a perspective over time. The second uses two recent five-year periods for a number of countries for which collecting comparable data covering long periods is not feasible. A positive, proportional relationship between the price level and money relative to real income is evident in data over long periods of time and over shorter periods for many countries. ; Does the behavior of inflation justify ignoring money growth when attempting to estimate future inflation? The evidence in this article indicates not.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Our checks indicate that this address may not be valid because: 404 Not Found. If this is indeed the case, please notify (Meredith Rector)
Download Restriction: no

Bibliographic Info

Article provided by Federal Reserve Bank of Atlanta in its journal Economic Review.

Volume (Year): (1999)
Issue (Month): Q2 ()
Pages: 32-43

as in new window
Handle: RePEc:fip:fedaer:y:1999:i:q2:p:32-43:n:v.84no.2

Contact details of provider:
Postal: 1000 Peachtree St., N.E., Atlanta, Georgia 30309
Phone: 404-521-8500
Web page:
More information through EDIRC

Order Information:

Related research

Keywords: Inflation (Finance) ; Demand for money ; Money supply ; Price levels;


No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:fip:fedaer:y:1999:i:q2:p:32-43:n:v.84no.2. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Meredith Rector).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.