Endogenous money supply and the business cycle

Article, Preprint OPEN
William T. Gavin; Finn E. Kydland;
  • Journal: Review of Economic Dynamics,volume 2,issue 2 April,pages347-369
  • Related identifiers: doi: 10.1006/redy.1998.0055
  • Subject: Business cycles ; Money supply | business cycle facts, endogenous monetary policy, real business cycles
    • jel: jel:E32 | jel:E42 | jel:E50

This paper documents changes in the cyclical behavior of nominal data series that appear after 1979:Q3 when the Federal Reserve implemented a policy to lower the inflation rate. Such changes were not apparent in real variables. A business cycle model with impulses to te... View more
  • References (18)
    18 references, page 1 of 2

    Backus, David K. and Patrick J. Kehoe. “International Evidence on the Historical Properties of Business Cycles,” American EconomicReview, vol. 82, no. 4 (September 1992), pp. 864-88.

    Bryan, Michael F. and William T. Gavin. “A Different Kind of Money illusion: The Case of Long and Variable Lags,” Journal of Policy Modeling, vol. 16, no. 5 (1994), pp. 529-40.

    Cooley, Thomas F. and Gary D. Hansen. “Money and the Business Cycle,” Chapter 7 in Frontiers of Business Cycle Research, Princeton University Press, Princeton, pp. 175-216.

    , and Lee K Ohanian. “The Cyclical Behavior of Prices,” Journal of Monetary Economics, vol. 28 (1991), pp. 25-60.

    Friedman, Benjamin M. and Kenneth N. Kuttner. “Money, Income, Prices, and Interest Rates,” American Economic Review, vol. 82, no. 3 (June 1992), pp. 472-92.

    Ghez, Gilbert R. and Gary S. Becker. The Allocation of Time and Goods over the Life Cycle. New York: Columbia University Press, 1975.

    Kydland, Finn E. “Monetary Policy in Models with Capital,” in F. van der Ploeg and A.J. de Zeeuw, eds., Dynamic Policy Games in Economies. Amsterdam: NorthHolland, 1989.

    ___________ “The Role of Money in a Business Cycle Model,” Federal Reserve Bank of Minneapolis, Discussion Paper 23, revised February 1991.

    and Edward C. Prescott. “Time to Build and Aggregate Fluctuations,” Econometrica, vol. 50(1982), pp. 1345-70.

    Mulligan, Casey B., and Xavier X. Sali-Martin. “The Optimum Quantity of Money: Theory and Evidence.” NBER Working Paper 5954, March 1997.

  • Metrics
Share - Bookmark