Author: Chris SchleicherPublisher:
ISBN:
Category :
Languages : en
Pages : 134
Book Description
Tracking the Asymmetric Effects of Positive and Negative Money-supply Shocks
Author: Chris SchleicherAsymmetric Effects of Positive and Negative Money-Supply Shocks
Author: James Peery CoverPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This paper examines whether positive and negative money-supply shocks have symmetric effects on output. The results are consistent with the hypothesis that positive money-supply shocks do not have an effect on output, while negative money-supply shocks do have an effect on output. This finding is independent of whether or not expected money is assumed to affect output. The results reported in this paper imply that the Fed could increase the growth rate of real output by reducing the standard deviation of unexpected changes in the money supply.
A Reconsideration of the Empirical Evidence on the Asymmetric Effects of Money-Supply Shocks
Author: Morten O. RavnPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This paper reconsiders the empirical evidence on the asymmetric output effects of monetary policy. Asymmetric effects is a common feature of many theoretical models, and there are many different versions of such asymmetries. We concentrate on the distinctions between positive and negative money-supply changes, big and small changes in money-supply, and possible combinations of the two asymmetries. Earlier research has found empirical evidence in favor of the former of these in US data. Using M1 as the monetary variable we find evidence in favor of neutrality of big shocks and non-neutrality of small shocks. The results may, however, be affected by structural instability of M1 demand. Thus, we substitute M1 with the federal funds rate. In these data we find that only small negative shocks affect real aggregate activity. The results are interpreted in terms of menu-cost models.
Working Paper
Author: A Reconsideration of the Empirical Evidence on the Asymmetric Effects of Money-supply Shocks
Author: Morten O. RavnPublisher:
ISBN:
Category : Demand for money
Languages : en
Pages : 29
Book Description
A Reconsideration of the Emprirical Evidence on the Asymmetric Effects of Money-supply Shocks
Author: Morten O. RavnAn Examination of the Asymmetric Effects of Money Supply Shocks in the Pre-World War I and Interwar Periods
Author: Randy ParkerPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
We test whether monetary shocks had asymmetric output effects before World War II. Ball and Mankiw (1994) show that expectations of persistent inflation under fiat money can explain why negative monetary shocks had larger effects than positive shocks after World War II. Consistent with this explanation, we find such asymmetry in the interwar period following the abandonment of the gold standard and before it, when agents arguably anticipated this development. We find no monetary asymmetry before World War I, which is consistent with Ball and Mankiw (1994), because under a credible gold standard, agents do not expect persistent inflation. (JEL E31, ES2).
Asymmetric Effects of Money-supply Shocks on Real Output and Prices
Author: Pik-ki LaiPublisher:
ISBN:
Category : Keynesian economics
Languages : en
Pages : 372
Book Description
The Asymmetric Effects of Monetary Policy
Author: Charles L. WeisePublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This paper tests for nonlinearity in a standard vector autoregression including output, prices, and money supply, using an estimation strategy that is consistent with a wide range of structural macroeconomic models. Shocks to the money supply are found to have stronger output effects and weaker price effects when output growth is initially low. Positive and negative monetary shocks are found to have nearly symmetric effects. In addition, there is some evidence that shocks of different magnitudes have asymmetric effects. These results are consistent with the view that the aggregate supply curve is convex.
Why are the Effects of Money-Supply Shocks Asymmetric? Evidence from Prices, Consumption, and Investment
Author: Georgios KarrasPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
This paper investigates why the effects of money on output are asymmetric. We show that Cover's (1992) methodology is a special case of a more general model which enables us to distinguish between two sets of theories consistent with the output asymmetries: a convex aggregate supply, and a pushing-on-a-string view. We find that the effects of money on prices are symmetric, which is consistent with both sets of theories being operative at once. We also show that consumption responds symmetrically to money, whereas the response of fixed investment is characterized by asymmetries very similar to those that affect output. Finally, we find that the asymmetries in the effects of money supply shocks are intensified by increases in the rate of inflation.