On the relationship between real and nominal variables in developed countries

Petr Duczynski

Prague Economic Papers, 2009, vol. 2009, issue 1, 48-60

Abstract: The paper examines money-output and price-output relations in developed countries between 1980 and 2005. We observe that declines in the nominal monetary base are connected with a moderately below-average behaviour of the real output. The same result applies for small positive growth rates of nominal M1 and M2. High growth rates of money are associated with the above-average product growth. We have some evidence that broader monetary aggregates are more closely associated with the real product than narrower monetary aggregates. As opposed to the money-output connection, we show that low inflation was accompanied by high product growth.

Keywords: consumer prices; real output; developed countries; nominal monetary aggregates (search for similar items in EconPapers)
JEL-codes: E31 E40 O40 (search for similar items in EconPapers)
Date: 2009
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DOI: 10.18267/j.pep.341

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