Money and sectoral output dynamics in the United States, quarterly 1950/III to 1982/IV
AbstractThe impact of money growth and money growth surprises is investigated in a framework in which GNP is disaggregated into its major sectoral components. The evidence presented is not fully consistent with a new classical interpretation of the business cycle. In particular light is thrown on the issue of the lag effect of money surprises. It is discovered that, even when sectoral interactions are accounted for, there are effects of lagged money growth. These lags are inconsistent with an equilibrium/rational expectations approach to business cycles. It is also discovered that growth in an 'outside' component of money has significant real effects. The approach adopted offers the possibility that a structural disaggregation of the supple side of the economy may offer advantages not available in either natural rate or Keynesian macroeconomic models.
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Bibliographic InfoPaper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 1984-020.
Date of creation: 1984
Date of revision:
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NBER Working Papers
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