Does money still matter for U.S. output?

Helge Berger () and Pär Österholm

No 2008/7, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: In this note, we use multivariate models estimated with Bayesian techniques and an out-ofsample approach to investigate whether money growth Granger-causes output growth in the United States. We find surprisingly strong evidence for a money-output link over the 1960-2005 period. However, further analysis indicates that this result is likely to be misleading; after the Great moderation, the Granger-causal role of money appears to have vanished completely.

Keywords: Bayesian VAR; out-of-sample forecasting; granger causality; money; output; federal reserve; Volcker (search for similar items in EconPapers)
JEL-codes: C32 C53 E47 E52 (search for similar items in EconPapers)
Date: 2008
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Journal Article: Does money still matter for U.S. output? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:20087

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