Money Demand and the Effects of Fiscal Policies

N. Gregory Mankiw and Lawrence Summers

Journal of Money, Credit and Banking, 1986, vol. 18, issue 4, 415-29

Abstract: This paper reexamines the choice of the scale variable in the money-demand function. A variety of evidence suggests that consumer spending is a better scale variable than GNP. Changing the money- demand specification along these lines can profoundly affect the standard Keynesian analysis of a tax cut. Copyright 1986 by Ohio State University Press.

Date: 1986
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Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:18:y:1986:i:4:p:415-29

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