American Economic Review Vol. 90 No. 5 2000
Monetary Aggregates and Output
Abstract
We ask whether the following observations may result from endogenously determined fluctuations in the money multiplier rather than a causal influence of money on output: (i) M1 is positively correlated with real output; (ii) the money multiplier and deposit-to-currency ratio are positively correlated with output; (iii) the price level is negatively correlated with output; (iv) the correlation of M1 with contemporaneous prices is substantially weaker than the correlation of M1 with real output; (v) correlations among real variables are essentially unchanged under different monetary-policy regimes; and (vi) real money balances are smoother than money-demand equations would predict.
- DOI
- 10.1257/aer.90.5.1125
- Volume
- 90
- Issue
- 5
- Pages
- 1125-1135
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref