Unanticipated Money and Economic Activity
In: Rational Expectations and Economic Policy
This paper discusses ongoing research on the relation of money to economic activity in the post-World War I1 United States. As in previous work, the stress is on the distinction between anticipated and unanticipated movements of money. Part I deals with annual data. Aside from updating and refinements of earlier analysis, the principal new results concern joint, cross-equation estimation and testing of the money growth, unemployment, output and price level equations. The present findings raise some doubts about the specification of the price equation, although the other relations receive further statistical support. Part I1 applies the analysis to quarterly data. Despite the necessity to deal with pronounced serial correlation of residuals in the equations for unemployment, output and the price level, the main results are consistent with those obtained from annual data. Further, the quarterly estimates allow a detailed description of the lagged response of unemployment and output to money shocks. The estimates reveal some lack of robustness in the price equation, which again suggests some misspecification of this relation.
(This abstract was borrowed from another version of this item.)
|This chapter was published in: ||This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number
6260.||Handle:|| RePEc:nbr:nberch:6260||Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Fischer, Stanley, 1977. "Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 191-205, February.
- Sargent, Thomas J, 1976. "A Classical Macroeconometric Model for the United States," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 207-37, April.
- Taylor, John B, 1980.
"Aggregate Dynamics and Staggered Contracts,"
Journal of Political Economy,
University of Chicago Press, vol. 88(1), pages 1-23, February.
- Phelps, Edmund S & Taylor, John B, 1977. "Stabilizing Powers of Monetary Policy under Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 163-90, February.
- 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.
- Robert J. Barro, 1976. "Unanticipated Money Growth and Unemployment in the United States," Working Papers 234, Queen's University, Department of Economics.
- Ray C. Fair, 1978.
"An Analysis of the Accuracy of Four Macroeconometric Models,"
Cowles Foundation Discussion Papers
492, Cowles Foundation for Research in Economics, Yale University.
- Fair, Ray C, 1979. "An Analysis of the Accuracy of Four Macroeconometric Models," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 701-18, August.
- Fischer, Stanley & Cooper, J Phillip, 1973. "Stabilization Policy and Lags," Journal of Political Economy, University of Chicago Press, vol. 81(4), pages 847-77, July-Aug..
- Barro, Robert J., 1976. "Rational expectations and the role of monetary policy," Journal of Monetary Economics, Elsevier, vol. 2(1), pages 1-32, January.
- Milton Friedman & Anna Jacobson Schwartz, 1970. "Monetary Statistics of the United States: Estimates, Sources, Methods," NBER Books, National Bureau of Economic Research, Inc, number frie70-1, September.
- Plosser, Charles I. & Schwert*, G. William, 1978. "Money, income, and sunspots: Measuring economic relationships and the effects of differencing," Journal of Monetary Economics, Elsevier, vol. 4(4), pages 637-660, November.
- McCallum, Bennett T, 1977. "Price-Level Stickiness and the Feasibility of Monetary Stabilization Policy with Rational Expectations," Journal of Political Economy, University of Chicago Press, vol. 85(3), pages 627-34, June.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberch:6260. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.