This file is part of IDEAS , which uses RePEc data
[ Papers |
Articles |
Software |
Books |
Chapters |
Authors |
Institutions |
JEL Classification |
NEP reports |
Search |
New papers by email |
Author registration |
Rankings |
Volunteers |
FAQ |
Blog |
Help! ]
Shrinking money and monetary business cycles Author info | Abstract | Publisher info | Download info | Related research | Statistics Harold L. Cole
Lee E. Ohanian
Additional information is available for the following
registered author(s):
In the postwar period velocity has risen so sharply in the U.S. that the ratio of money to nominal output has fallen by a factor of three. We analyze the implications of shrinking money for the real effects of a monetary shock in two classes of equilibrium monetary business cycle models: limited participation (liquidity) models and predetermined (sticky) price models. We show that the liquidity model predicts that a rise in velocity leads to a substantial reduction in the real effects of a monetary shock. In sharp contrast, we show that the real effects of a monetary shock in the sticky price model are largely invariant to changes in velocity. We provide evidence that suggests that the real effects of monetary shocks have fallen over the postwar period.
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Paper provided by Federal Reserve Bank of Minneapolis in its series Working Papers with number
579.
Download reference. The following formats are available: HTML
(with abstract ),
plain text
(with abstract ),
BibTeX ,
RIS (EndNote, RefMan, ProCite),
ReDIF
Length:
Date of creation: 1997Date of revision:
Handle: RePEc:fip:fedmwp:579Contact details of provider: Postal: 90 Hennepin Avenue, P.O. Box 291, Minneapolis, MN 55480-0291 Phone: (612) 204-5000 Web page: http://minneapolisfed.org/ More information through EDIRC
Order Information: Email: Web: http://www.minneapolisfed.org/pubs/
For technical questions regarding this item, or to correct its listing, contact: (Diane Rosenberger).
Keywords: Business cycles ; References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.:
Eden, Benjamin, 1994.
"The Adjustment of Prices to Monetary Shocks When Trade Is Uncertain and Sequential ,"
Journal of Political Economy ,
University of Chicago Press, vol. 102(3), pages 493-509, June.
[Downloadable!] (restricted)
Taylor, John B, 1979.
"Staggered Wage Setting in a Macro Model ,"
American Economic Review ,
American Economic Association, vol. 69(2), pages 108-13, May.
[Downloadable!] (restricted)
Ireland, Peter N, 1995.
"Endogenous Financial Innovation and the Demand for Money ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 27(1), pages 107-23, February.
[Downloadable!] (restricted)
Other versions: Lee E. Ohanian & Alan C. Stockman & Lutz Killian, 1994.
"The effects of real and monetary shocks in a business cycle model with some sticky prices ,"
Proceedings ,
Federal Reserve Bank of Cleveland, pages 1209-1240.
Other versions:
Ohanian, Lee E & Stockman, Alan C & Kilian, Lutz, 1995.
"The Effects of Real and Monetary Shocks in a Business Cycle Model with Some Sticky Prices ,"
Journal of Money, Credit and Banking ,
Blackwell Publishing, vol. 27(4), pages 1209-34, November.
[Downloadable!] (restricted) Cole, Harold L & Stockman, Alan C, 1992.
"Specialization, Transactions Technologies, and Money Growth ,"
International Economic Review ,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(2), pages 283-98, May.
[Downloadable!] (restricted)
Other versions:
Harold L. Cole & Alan C. Stockman, 1988.
"Specialization, Transactions Technologies, and Money Growth ,"
NBER Working Papers
2724, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Cole, H. & Stockman, A.C., 1988.
"Specialization, Transactions Technologies, And Money Growth ,"
RCER Working Papers
153, University of Rochester - Center for Economic Research (RCER).
Barro, Robert J, 1980.
"A Capital Market in an Equilibrium Business Cycle Model ,"
Econometrica ,
Econometric Society, vol. 48(6), pages 1393-1417, September.
[Downloadable!] (restricted)
Other versions: King, Robert G & Watson, Mark W, 1996.
"Money, Prices, Interest Rates and the Business Cycle ,"
The Review of Economics and Statistics ,
MIT Press, vol. 78(1), pages 35-53, February.
[Downloadable!] (restricted)
Other versions: Cho, Jang-Ok & Cooley, Thomas F, 1995.
"The Business Cycle with Nominal Contracts ,"
Economic Theory ,
Springer, vol. 6(1), pages 13-33, June.
Other versions:
Cooley, T.F. & Cho, J.O., 1991.
"The Business Cycle with Nominal Contracts ,"
Papers
90-07, Rochester, Business - General.
Cho, J.O. & Cooley, T.F., 1991.
"The Business Cycle with Nominal Contracts ,"
RCER Working Papers
260, University of Rochester - Center for Economic Research (RCER).
Adrian R. Pagan & John C. Robertson, 1995.
"Resolving the liquidity effect ,"
Proceedings ,
Federal Reserve Bank of St. Louis, issue May, pages 33-54.
[Downloadable!]
Other versions: Richard D. Porter & Ruth A. Judson, 1996.
"The location of U.S. currency: how much is abroad? ,"
Federal Reserve Bulletin ,
Board of Governors of the Federal Reserve System (U.S.), issue Oct, pages 883-903.
Mankiw, N Gregory, 1985.
"Small Menu Costs and Large Business Cycles: A Macroeconomic Model ,"
The Quarterly Journal of Economics ,
MIT Press, vol. 100(2), pages 529-38, May.
[Downloadable!] (restricted)
Lucas, Robert Jr., 1990.
"Liquidity and interest rates ,"
Journal of Economic Theory ,
Elsevier, vol. 50(2), pages 237-264, April.
[Downloadable!] (restricted)
Lucas, Robert Jr., 1972.
"Expectations and the neutrality of money ,"
Journal of Economic Theory ,
Elsevier, vol. 4(2), pages 103-124, April.
[Downloadable!] (restricted)
King, Robert G., 1988.
"Money demand in the United States: A quantitative review ,"
Carnegie-Rochester Conference Series on Public Policy ,
Elsevier, vol. 29(1), pages 169-172, January.
[Downloadable!] (restricted)
Barnett, William A & Offenbacher, Edward K & Spindt, Paul A, 1984.
"The New Divisia Monetary Aggregates ,"
Journal of Political Economy ,
University of Chicago Press, vol. 92(6), pages 1049-85, December.
[Downloadable!] (restricted)
Daniel L. Thornton & Piyu Yue, 1992.
"An extended series of divisia monetary aggregates ,"
Review ,
Federal Reserve Bank of St. Louis, issue Nov, pages 35-52.
[Downloadable!]
Friedman, Benjamin M & Kuttner, Kenneth N, 1992.
"Money, Income, Prices, and Interest Rates ,"
American Economic Review ,
American Economic Association, vol. 82(3), pages 472-92, June.
[Downloadable!] (restricted)
Lucas, Robert E., 1988.
"Money demand in the United States: A quantitative review ,"
Carnegie-Rochester Conference Series on Public Policy ,
Elsevier, vol. 29(1), pages 137-167, January.
[Downloadable!] (restricted)
Schlagenhauf, Don E. & Wrase, Jeffrey M., 1995.
"Liquidity and real activity in a simple open economy model ,"
Journal of Monetary Economics ,
Elsevier, vol. 35(3), pages 431-461, June.
[Downloadable!] (restricted)
Other versions: Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems ,"
Econometrica ,
Econometric Society, vol. 61(4), pages 783-820, July.
[Downloadable!] (restricted)
Other versions: Cooley, Thomas F & Hansen, Gary D, 1989.
"The Inflation Tax in a Real Business Cycle Model ,"
American Economic Review ,
American Economic Association, vol. 79(4), pages 733-48, September.
[Downloadable!] (restricted)
Other versions:
Cooley, T.F. & Hansen, G.D., 1988.
"The Inflation Tax In A Real Business Cycle Model ,"
Papers
88-05, Rochester, Business - General.
Thomas F. Cooley & Gary D. Hansen, 1987.
"The Inflation Tax in a Real Business Cycle Model ,"
UCLA Economics Working Papers
496, UCLA Department of Economics.
[Downloadable!] Cooley, T.F. & Hansen, G.D., 1988.
"The Inflation Tax In A Real Business Cycle Model ,"
RCER Working Papers
155, University of Rochester - Center for Economic Research (RCER).
Ireland, Peter N, 1994.
"Money and Growth: An Alternative Approach ,"
American Economic Review ,
American Economic Association, vol. 84(1), pages 47-65, March.
[Downloadable!] (restricted)
Bental, Benjamin & Eden, Bemjamin, 1996.
"Money and inventories in an economy with uncertain and sequential trade ,"
Journal of Monetary Economics ,
Elsevier, vol. 37(3), pages 445-459, June.
[Downloadable!] (restricted)
Barro, Robert J, 1977.
"Unanticipated Money Growth and Unemployment in the United States ,"
American Economic Review ,
American Economic Association, vol. 67(2), pages 101-15, March.
Other versions: Robert E. Lucas, Jr. & Michael Woodford, 1993.
"Real Effects of Monetary Shocks in an Economy with Sequential Purchases ,"
NBER Working Papers
4250, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
repec:fip:fedreq:y:1984:i:sep:p:3-12:n:v.70no.5 is not listed on IDEAS
Rotemberg, Julio J, 1984.
"A Monetary Equilibrium Model with Transactions Costs ,"
Journal of Political Economy ,
University of Chicago Press, vol. 92(1), pages 40-58, February.
[Downloadable!] (restricted)
Other versions: Robert E. Lucas, Jr. & Nancy L. Stokey, 1987.
"Money and Interest in a Cash-in-Advance Economy ,"
NBER Working Papers
1618, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Robert E. Lucas Jr. & Nancy L. Stokey, 1984.
"Money and Interest in Cash-In-Advance Economy ,"
Discussion Papers
628, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
[Downloadable!] Lucas, Robert E, Jr & Stokey, Nancy L, 1987.
"Money and Interest in a Cash-in-Advance Economy ,"
Econometrica ,
Econometric Society, vol. 55(3), pages 491-513, May.
[Downloadable!] (restricted)
Full
references
Access and
download statistics Did you know? RePEc data is maintained by each archive holder on its own website. Nothing is held centrally.
This page was last updated on 2009-11-26.
This information is provided to you by IDEAS at the Department of Economics , College of Liberal Arts and Sciences , University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics .