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The Effects of Money Growth on Inflation and Interest Rates across Spectral Frequency Bands

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Author Info
Thoma, Mark A
Abstract

Band spectral regression techniques are used to identify the frequency bands that are most important in the relationships between money growth and inflation, and between money growth and the nominal interest rate. The results show that cycles in the growth rate of M1 from one to two years long produce higher frequency cycles in inflation and two distinct sets of higher frequency cycles in changes in the nominal interest rate. The results support models where predictable changes in money growth produce liquidity and anticipated inflation effects on nominal interest rates. Copyright 1994 by Ohio State University Press.

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File URL: http://links.jstor.org/sici?sici=0022-2879%28199405%2926%3A2%3C218%3ATEOMGO%3E2.0.CO%3B2-7&origin=bc
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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Money, Credit and Banking.

Volume (Year): 26 (1994)
Issue (Month): 2 (May)
Pages: 218-31
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:mcb:jmoncb:v:26:y:1994:i:2:p:218-31

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879

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  1. D.M. Nachane & Amlendu Kumar Dubey, 2008. "The vanishing role of money in the macroeconomy: An Empirical investigation based on spectral and wavelet analysis," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-022, Indira Gandhi Institute of Development Research, Mumbai, India. [Downloadable!]
  2. Assenmacher-Wesche, Katrin & Gerlach, Stefan, 2006. "Money Growth, Output Gaps and Inflation at Low and High Frequency: Spectral Estimates for Switzerland," CEPR Discussion Papers 5723, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  3. Assenmacher-Wesche, Katrin & Gerlach, Stefan, 2006. "Interpreting Euro Area Inflation at High and Low Frequencies," CEPR Discussion Papers 5632, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Mark Crosby & Glenn Otto, 2001. "Growth and the Real Exchange Rate - Evidence from Eleven Countries," Working Papers 082001, Hong Kong Institute for Monetary Research. [Downloadable!]
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