Inflation, money, and output under alternative monetary standards
Our study examines whether there is a systematic relationship between the monetary standard under which a country operates and the rate of inflation it experiences. It also explores whether there are other properties of inflation, money, and output that differ between economies operating under a commodity standard and economies operating under a fiat standard. The basis for our study is price, money, and output data for 15 countries that have operated under both types of monetary standards. For each of these countries the data cover 80 years, and for most the data cover more than 100 years. With these data we are able to establish several facts about the differences in inflation, money growth, and output growth between economies operating under commodity standards and those operating under fiat standards. Specifically, we find that the following facts emerge when comparing commodity standards to fiat standards: inflation, money growth, and output growth are all lower; growth rates of monetary aggregates are less highly correlated with each other; growth rates of monetary aggregates are less highly correlated with inflation; and growth rates of monetary aggregates are more highly correlated with output growth.
|Date of creation:||1994|
|Contact details of provider:|| Postal: 90 Hennepin Avenue, P.O. Box 291, Minneapolis, MN 55480-0291|
Phone: (612) 204-5000
Web page: http://minneapolisfed.org/
More information through EDIRC
|Order Information:||Web: http://www.minneapolisfed.org/pubs/|
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.:
- Backus, David K & Kehoe, Patrick J, 1992.
"International Evidence of the Historical Properties of Business Cycles,"
American Economic Review,
American Economic Association, vol. 82(4), pages 864-888, September.
- David K. Backus & Patrick J. Kehoe, 1991. "International evidence on the historical properties of business cycles," Staff Report 145, Federal Reserve Bank of Minneapolis.
- David K. Backus & Patrick J. Kehoe, 1992. "International Evidence on the Historical Properties of Business Cycles," Working Papers 92-5, New York University, Leonard N. Stern School of Business, Department of Economics.
- Thomas J. Sargent, 1981.
"The ends of four big inflations,"
158, Federal Reserve Bank of Minneapolis.
- Anna J. Schwartz, 1987.
"Secular Price Change in Historical Perspective,"
in: Money in Historical Perspective, pages 78-109
National Bureau of Economic Research, Inc.
- James Tobin, 1963. "Commercial Banks as Creators of 'Money'," Cowles Foundation Discussion Papers 159, Cowles Foundation for Research in Economics, Yale University.
- Michael D. Bordo & Finn E. Kydland, 1990.
"The Gold Standard as a Rule,"
NBER Working Papers
3367, National Bureau of Economic Research, Inc.
- anonymous, 1977. "Questioning Federal Reserve policies," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum.
- 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.
- Thomas J. Sargent & Neil Wallace, 1983.
"A model of commodity money,"
85, Federal Reserve Bank of Minneapolis.
- 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, April.
- Pierre Sicsic, 1989. "Estimation du stock de monnaie métallique en France à la fin du XIXe siècle," Revue Économique, Programme National Persée, vol. 40(4), pages 709-736.
- Thomas J. Weiss, 1992. "U. S. Labor Force Estimates and Economic Growth, 1800-1860," NBER Chapters, in: American Economic Growth and Standards of Living before the Civil War, pages 19-78 National Bureau of Economic Research, Inc.
- Neil Wallace, 1977. "Why the Fed should consider holding M0 constant," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Sum.
- Gerald P. Dwyer & R. W. Hafer, 1988. "Is money irrelevant?," Review, Federal Reserve Bank of St. Louis, issue May, pages 3-17.
When requesting a correction, please mention this item's handle: RePEc:fip:fedmsr:175. 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: (Jannelle Ruswick)
If references are entirely missing, you can add them using this form.