The European Central Bank has assigned a special role to money in its two pillar strategy and has received much … criticism for this decision. In this paper, we explore possible justifications. The case against including money in the central … contributions to research on monetary policy in the last two decades. Of course, if one allows for a direct effect of money on …

criticized for failing to explain common trends in money growth and inflation, and that therefore money should be used as a cross …

The European Central Bank has assigned a special role to money in its two pillar strategy and has received much … criticism for this decision. The case against including money in the central bank's interest rate rule is based on a standard … decades. In this paper, we develop a justification for including money in the interest rate rule by allowing for imperfect …

modified to account for observed money growth and inflation trends, and that monetary trends may serve as a useful cross … persistent errors in monetary policy and sustained trends in money growth and inflation. If interest rate prescriptions derived … from Keynesian-style models are augmented with a cross-check against money-based estimates of trend inflation, inflation …

IS-LM framework tends to understate the value of money as an indicator for monetary policy. …

justified empirically. Both the relation between money and inflation, and between money and aggregate demand, are considered … by money growth. This relationship arises from a conventional aggregate-demand channel; an emphasis on the link between … monetary aggregates and inflation in no way requires a direct channel connecting money and inflation. The relevance of money …

asset (money). We show that, even in the absence of asymmetric information or an agency problem, the private provision of … this. This distortion is present even if we introduce lending and government money. To eliminate the inefficiency the …

driven by the crisis. Our general point is that money matters in financial markets. Different financial assets have different …

purchase different sizes of transactions. This can explain the demand for money itself, the precautionary demand for money, and …

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 for variation in output growth and the opportunity cost of money, using …