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Some monetary facts

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  • George T. McCandless
  • Warren E. Weber

Abstract

This article describes three long-run monetary facts derived by examining data for 110 countries over a 30-year period, using three definitions of a country's money supply and two subsamples of countries: (1) Growth rates of the money supply and the general price level are highly correlated for all three money definitions, for the full sample of countries, and for both subsamples. (2) The growth rates of money and real output are not correlated, except for a subsample of countries in the Organisation for Economic Co-operation and Development, where these growth rates are positively correlated. (3) The rate of inflation and the growth rate of real output are essentially uncorrelated. ; Reprinted in Quarterly Review, Fall 2001 (v. 25, no. 4)

Suggested Citation

  • George T. McCandless & Warren E. Weber, 1995. "Some monetary facts," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 19(Sum), pages 2-11.
  • Handle: RePEc:fip:fedmqr:y:1995:i:sum:p:2-11:n:v.19no.3
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    References listed on IDEAS

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    2. Neil R. Ericsson & John S. Irons & Ralph W. Tryon, 2001. "Output and inflation in the long run," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 241-253.
    3. Lucas, Robert E, Jr, 1980. "Two Illustrations of the Quantity Theory of Money," American Economic Review, American Economic Association, vol. 70(5), pages 1005-1014, December.
    4. Stanley Fischer, 1983. "Inflation and Growth," NBER Working Papers 1235, National Bureau of Economic Research, Inc.
    5. Robert E. Hall, 1982. "Inflation: Causes and Effects," NBER Books, National Bureau of Economic Research, Inc, number hall82-1, March.
    6. Levine, Ross & Renelt, David, 1992. "A Sensitivity Analysis of Cross-Country Growth Regressions," American Economic Review, American Economic Association, vol. 82(4), pages 942-963, September.
    7. Smith, Bruce D, 1985. "Some Colonial Evidence on Two Theories of Money: Maryland and the Carolinas," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1178-1211, December.
    8. Geweke, John F, 1986. "The Superneutrality of Money in the United States: An Interpretation of the Evidence," Econometrica, Econometric Society, vol. 54(1), pages 1-21, January.
    9. Kormendi, Roger C. & Meguire, Philip G., 1985. "Macroeconomic determinants of growth: Cross-country evidence," Journal of Monetary Economics, Elsevier, vol. 16(2), pages 141-163, September.
    10. Poirier, Dale J, 1991. "A Bayesian View of Nominal Money and Real Output through a New Classical Macroeconomic Window," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(2), pages 125-148, April.
    11. Gerald P. Dwyer & Rik Hafer, 1988. "Is money irrelevant?," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-17.
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    Keywords

    Monetary theory; Money supply;

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    1. Advanced Monetary Theory and Policy (ECON 447)

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