US volatility cycles of output and inflation, 1919 - 2004 : a money and banking approach to a puzzle

Szilárd Benk, Max Gillman and Michal Kejak

The post-1983 moderation coincided with an ahistorical divergence in the money aggregate growth and velocity volatilities away from the downward trending GDP and inflation volatilities. Using an endogenous growth monetary DSGE model, with micro-based banking production, enables a contrasting characterization of the two great volatility cycles over the historical period of 1919-2004, and enables this puzzle to be addressed more easily. The volatility divergence is explained by the upswing in the credit volatility that kept money supply variability from translating into inflation and GDP volatility. -- Volatility ; money and credit shocks ; growth ; inflation

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Year of publication:	2008
Other Persons:	Benk, Szilárd (contributor) ; Gillman, Max (contributor) ; Kejak, Michal (contributor)
Publisher:	Cardiff : Cardiff Univ, Cardiff Business School, Economics Section
Subject:	Bruttoinlandsprodukt \| Gross domestic product \| Inflationsrate \| Inflation rate \| Volatilität \| Volatility \| Kreditmarkt \| Credit market \| Geldmenge \| Money supply \| Dynamisches Gleichgewicht \| Dynamic equilibrium \| USA \| United States \| 1919-2004