MONEY AND MONETARY POLICY IN DYNAMIC STOCHASTIC GENERAL EQUILIBRIUM MODELS
Arnab Bhattacharjee () and
Christoph Thoenissen ()
Manchester School, 2007, vol. 75, issue s1, pages 88-122
We compare two methods of motivating money in New Keynesian dynamic stochastic general equilibrium models-money-in-the-utility function and the cash-in-advance (CIA) constraint-as well as two ways of modelling monetary policy: the interest rate feedback rule and money growth rules. As an aid to model selection, we use a new econometric measure of the distance between model and data variance-covariance matrices. The proposed measure is useful in distinguishing between alternative general equilibrium models. Drawing on our econometric analysis, we argue that the CIA model, closed by a money growth rule, comes closest to the data. Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd and The University of Manchester.
References: Add references at CitEc
Citations View citations in EconPapers (15) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9957.2007.01039.x link to full text (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:bla:manchs:v:75:y:2007:i:s1:p:88-122
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786
Access Statistics for this article
Manchester School is currently edited by Keith Blackburn
More articles in Manchester School from University of Manchester Contact information at EDIRC.
Series data maintained by Wiley-Blackwell Digital Licensing ().