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On the Welfare Cost of Inflation and the Recent Behavior of Money Demand
Ireland, Peter - National Bureau of Economic Research (NBER) - 2008
Post-1980 U.S. data trace out a stable long-run money demand relationship of Cagan's semi-log form between the M1-income ratio and the nominal interest rate, with an interest semi-elasticity below 2. Integrating under this money demand curve yields estimates of the welfare costs of modest...
Persistent link: https://www.econbiz.de/10005828669
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The Common Development of Institutional Change as Measured by Income Velocity: A Century of Evidence from Industrialized Countries
Bordo, Michael David; Jonung, Lars; Siklos, Pierre - National Bureau of Economic Research (NBER) - 1993
Previous evidence, most recently by Bordo and Jonung (1990) and Silclos (1988b, 1991), has shown on a country-by-country basis that proxies for institutional change significantly improve our understanding of the long-run behaviour of velocity and. consequently, of the demand for money. If...
Persistent link: https://www.econbiz.de/10005828768
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Putting 'M' back in Monetary Policy
Leeper, Eric; Roush, Jennifer E. - National Bureau of Economic Research (NBER) - 2003
Money demand and the stock of money have all but disappeared from monetary policy analyses. This paper is an empirical contribution to the debate over the role of money in monetary policy analysis. The paper models supply and demand interactions in the money market and finds evidence of an...
Persistent link: https://www.econbiz.de/10005829789
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Why Has the Euro Been Falling? An Investigation into the Determinants of the Exchange Rate
Sinn, Hans-Werner; Westermann, Frank - National Bureau of Economic Research (NBER) - 2001
This paper reconsiders the determinants of the exchange rate by studying the historical episode after the fall of the Iron Curtain. Testing a modified portfolio balance model, we attribute the strength of the deutschmark in the early nineties and the puzzling decline of the euro during its...
Persistent link: https://www.econbiz.de/10005830291
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Foreign Demand for Domestic Currency and the Optimal Rate of Inflation
Schmitt-Grohé, Stephanie Schmitt-Grohe; Uribe, Martín - National Bureau of Economic Research (NBER) - 2009
More than half of U.S. currency circulates abroad. As a result, much of the seignorage income of the United States is generated outside of its borders. In this paper we characterize the Ramsey-optimal rate of inflation in an economy with a foreign demand for its currency. In the absence of such...
Persistent link: https://www.econbiz.de/10008615792
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The Great Inflation: Did the Shadow Know Better?
Poole, William; Rasche, Robert H.; Wheelock, David C. - National Bureau of Economic Research (NBER) - 2011
.S. policymakers to implement policies necessary to maintain price stability. This paper describes how the Committee's policy views … stability should be the primary goal of monetary policy and favored gradual adjustment of monetary growth to a rate consistent … with price stability. This paper evaluates the Shadow's policy rule in the context of the New Keynesian macroeconomic model …
Persistent link: https://www.econbiz.de/10008876847
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Liquidity and the Threat of Fraudulent Assets
Weill, Pierre-Olivier; Li, Yiting; Rocheteau, Guillaume - National Bureau of Economic Research (NBER) - 2011
We study an over-the-counter (OTC) market with bilateral meetings and bargaining where the usefulness of assets, as means of payment or collateral, is limited by the threat of fraudulent practices. We assume that agents can produce fraudulent assets at a positive cost, which generates endogenous...
Persistent link: https://www.econbiz.de/10009325525
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Persistent Liquidity Effects and Long Run Money Demand
Alvarez, Fernando E.; Lippi, Francesco - National Bureau of Economic Research (NBER) - 2011
demand estimates as-well-as the stability of long-run interest-elastic money demand. …
Persistent link: https://www.econbiz.de/10009359892
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Is Quantity Theory Still Alive?
Uhlig, Harald; Teles, Pedro - National Bureau of Economic Research (NBER) - 2010
This paper investigates whether the quantity theory of money is still alive. We demonstrate three insights. First, for countries with low inflation, the raw relationship between average inflation and the growth rate of money is tenuous at best. Second, the fit markedly improves, when correcting...
Persistent link: https://www.econbiz.de/10008680930
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Inefficient Provision of Liquidity
Hart, Oliver D.; Zingales, Luigi - National Bureau of Economic Research (NBER) - 2011
We study an economy where the lack of a simultaneous double coincidence of wants creates the need for a relatively safe asset (money). We show that, even in the absence of asymmetric information or an agency problem, the private provision of liquidity is inefficient. The reason is that liquidity...
Persistent link: https://www.econbiz.de/10009251522