Endogenous Money Supply and the Business Cycle

William Gavin () and Finn Kydland

Review of Economic Dynamics, 1999, vol. 2, issue 2, 347-369

Abstract: This paper documents changes in the cyclical behavior of nominal data series that appear after 1979:Q3 when the Federal Reserve implemented a policy to lower the inflation rate. Such changes were not apparent in real variables. A business cycle model with impulses to technology and a role for money is used to show how alternative money supply rules are expected to affect observed business cycle facts. In this model, changes in the money supply rules have almost no effect on the cyclical behavior of real variables, yet have a significant impact on the cyclically nature of nominal variables. (Copyright: Elsevier)

Keywords: business cycle facts; endogenous monetary policy; real business cycles (search for similar items in EconPapers)
JEL-codes: E32 E42 E50 (search for similar items in EconPapers)
Date: 1999
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Citations: View citations in EconPapers (43)

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Related works:
Working Paper: Endogenous money supply and the business cycle (1997)
Working Paper: Endogenous money supply and the business cycle (1996)
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DOI: 10.1006/redy.1998.0055

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