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Monetary aggregates and output

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  • Scott Freeman
  • Finn E. Kydland

Abstract

This paper offers a general equilibrium model that explains how the observed correlations of money and output fluctuations may come about through endogenously determined fluctuations in the money multiplier. The model is calibrated to meet long-run (including monetary) features of the U.S. economy; it is then subjected to shocks to the Solow residual following a random process similar to that observed in U.S. data.

Suggested Citation

  • Scott Freeman & Finn E. Kydland, 1998. "Monetary aggregates and output," Working Papers (Old Series) 9813, Federal Reserve Bank of Cleveland.
    • Handle: RePEc:fip:fedcwp:9813
    DOI: 10.26509/frbc-wp-199813
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    More about this item

    Keywords

    Money supply;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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