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Measurement Matters: Recent Results from Monetary Economics Reexamined

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  • Belongia, Michael T

Abstract

Inferences about the effects of money on economic activity may depend importantly on the choice of a monetary index because simple-sum aggregates cannot internalize pure substitution effects. This hypothesis is investigated by replicating five recent studies that have challenged an aspect of the 'conventional wisdom' about the effects of money on aggregate activity. In four of the five cases, the qualitative inference in the original study is reversed when a simple-sum monetary aggregate is replaced by a Divisia index of the same asset collection. The results are mixed in the fifth case. Copyright 1996 by University of Chicago Press.

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  • Belongia, Michael T, 1996. "Measurement Matters: Recent Results from Monetary Economics Reexamined," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 1065-1083, October.
  • Handle: RePEc:ucp:jpolec:v:104:y:1996:i:5:p:1065-83
    DOI: 10.1086/262052
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    References listed on IDEAS

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