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What Have We Learned from Empirical Tests of the Monetary Transmission Effect

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  • Norrbin, Stefan

    (Department of Economics, Florida State University)

Abstract

The transmission effect of money has been a frequently debated issue. This paper discusses the empirical literature examining the effect of money on real output. In contrast to the commonly held belief that money has a powerful effect on output, most empirical tests of money shows relatively minor, but persistent effects. This is especially true for the extensive VAR literature. The paper focuses on the potential problems and issues that researchers have to account for when designing the empirical tests of the effects of monetary policy. Hopefully this paper will help in generating some discussion about the future direction of the empirical literature.

Suggested Citation

  • Norrbin, Stefan, 2001. "What Have We Learned from Empirical Tests of the Monetary Transmission Effect," Working Paper Series 121, Sveriges Riksbank (Central Bank of Sweden).
    • Handle: RePEc:hhs:rbnkwp:0121
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    3. Jens R. Clausen & Juergen B. Donges, 2001. "European Monetary Policy: The Ongoing Debate on Conceptual Issues," The World Economy, Wiley Blackwell, vol. 24(10), pages 1309-1326, November.

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    Keywords

    Monetary transmission mechanism; Effects of monetary policy;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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