Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data
AbstractThis paper uses contemporaneous monetary data to carry out econometric tests of the "equilibrium" approach to modeling the relation between monetary disturbances and macroeconomic fluctuations. The theoretical analysis introduces into an equilibrium macroeconomic model the availability of preliminary data on current monetary aggregates and the process of accumulation of revised monetary data. The econometric analysis tests two hypotheses derived from this extended model. One hypothesis concerns the neutrality of perceived monetary policy. The other hypothesis concerns the nonneutrality of errors in preliminary monetary data. The econometric results imply rejection of both of these hypotheses. These tests provide strong evidence against the reality of the equilibrium approach.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 0558.
Date of creation: Oct 1981
Date of revision:
Publication status: published as Boschen, John F. and Grossman, Herschel I. "Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data." Journal of Monetary Economics, Vol. 10 (1982), pp. 309-333.
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
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Other versions of this item:
- Boschen, John F. & Grossman, Herschel I., 1982. "Tests of equilibrium macroeconomics using contemporaneous monetary data," Journal of Monetary Economics, Elsevier, vol. 10(3), pages 309-333.
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- King, Robert G., 1981. "Monetary information and monetary neutrality," Journal of Monetary Economics, Elsevier, vol. 7(2), pages 195-206.
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- Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
- John F. Boschen & Herschel I. Grossman, 1980. "Monetary Information and Macroeconomic Fluctuations," NBER Working Papers 0498, National Bureau of Economic Research, Inc.
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