EconPapers    
Economics at your fingertips  
 

Monetary Aggregates and Liquidity in a Neo-Wicksellian Framework

Matthew Canzoneri, Robert Cumby (), Behzad Diba and David L√pez-Salido

Journal of Money, Credit and Banking, 2008, vol. 40, issue 8, 1667-1698

Abstract: Woodford (2003) describes a popular class of neo-Wicksellian (NW) models in which monetary policy is characterized by an interest rate rule, and the money market and financial institutions are typically not even modeled. Critics contend that these models are incomplete and unsuitable for monetary policy evaluation. Our banks and bonds (BB) model starts with a standard NW model and then adds banks and a role for bonds in the liquidity management of households and banks. The BB model gives a more complete description of the economy, but the NW model has the virtue of simplicity. Our purpose here is to see if the NW model gives a reasonably accurate account of macroeconomic behavior in the more complete BB model. We do this by comparing the models' second moments, variance decompositions, and impulse response functions. We also study the role of monetary aggregates and velocity in predicting inflation in the two models. Copyright (c) 2008 The Ohio State University.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (67)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Monetary Aggregates and Liquidity in a Neo-Wicksellian Framework (2008) Downloads
Working Paper: Monetary aggregates and liquidity in a neo-Wicksellian framework (2008) Downloads
Working Paper: Monetary Aggregates and Liquidity in a Neo-Wicksellian Framework (2008) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcb:jmoncb:v:40:y:2008:i:8:p:1667-1698

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley-Blackwell Digital Licensing () and Christopher F. Baum ().

 
Page updated 2025-03-19
Handle: RePEc:mcb:jmoncb:v:40:y:2008:i:8:p:1667-1698