Reportgreen1981

Tests of Equilibrium Macroeconomics Using Contemporaneous Monetary Data

34 citations0/0 files storedNational Bureau of Economic Research

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Monetary Policy and Economic Impact Economic Theory and Policy Economic theories and models

Abstract

This paper uses contemporaneous monetary data to carry out econometric tests of the "equilibrium" approach to modelling 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.

Citations in this library

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References

1972Expectations and the neutrality of money 1976Rational expectations and the role of monetary policy 1976Unanticipated Money Growth and Unemployment in the United States n.d.Rational Expectations and Economic Policy 1979Unanticipated Money and Economic Activity 1980Money stock revisions and unanticipated money growth 1981Monetary information and monetary neutrality

Cited by

1990Deflating the Case for Zero Inflation 1983A Linearized Version of Lucas's Neutrality Model 1997Deflating the Case for Zero Inflation 1990The Legacy of the Monetarist Controversy 2005Regional Monetary Policy 2003Monetary Policy in the Information Economy 1983Shunto, Rational Expectations, and Output Growth in Japan 2006Regional monetary policy

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