Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data
This paper uses contemporaneous monetary data to carry out econometric tests of the "equilibrium" approach to modeling the relation between monetary disturbances and macroeconomic fluctuations. The theoretical analysis introduces into an equilibrium macroeconomic model the availability of preliminary data on current monetary aggregates and the process of accumulation of revised monetary data. The econometric analysis tests two hypotheses derived from this extended model. One hypothesis concerns the neutrality of perceived monetary policy. The other hypothesis concerns the nonneutrality of errors in preliminary monetary data. The econometric results imply rejection of both of these hypotheses. These tests provide strong evidence against the reality of the equilibrium approach.
|Date of creation:||Oct 1981|
|Publication status:||published as Boschen, John F. and Grossman, Herschel I. "Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data." Journal of Monetary Economics, Vol. 10 (1982), pp. 309-333.|
|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
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- King, Robert G., 1981. "Monetary information and monetary neutrality," Journal of Monetary Economics, Elsevier, vol. 7(2), pages 195-206.
- Robert J. Barro & Mark Rush, 1980. "Unanticipated Money and Economic Activity," NBER Chapters,in: Rational Expectations and Economic Policy, pages 23-73 National Bureau of Economic Research, Inc.
- Barro, Robert J. & Hercowitz, Zvi, 1980.
"Money stock revisions and unanticipated money growth,"
Journal of Monetary Economics,
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- Robert J. Barro & Zvi Hercowitz, 1979. "Money Stock Revisions and Unanticipated Money Growth," NBER Working Papers 0329, National Bureau of Economic Research, Inc.
- John F. Boschen & Herschel I. Grossman, 1980. "Monetary Information and Macroeconomic Fluctuations," NBER Working Papers 0498, National Bureau of Economic Research, Inc.
- Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
- Lucas, Robert Jr., 1972. "Expectations and the neutrality of money," Journal of Economic Theory, Elsevier, vol. 4(2), pages 103-124, April.
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