DOES MONEY STILL MATTER?

Willis L. Peterson

No 14122, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: Money is broadly defined to include M2 plus large denomination time deposits and deposits in savings institutions. Splitting M2+ into two components, M1 and the remainder, MD, each was found to bear a stable relationship to GDP over the 1929-94 period. An economic test of the causality question reveals that it runs from money to economic activity. Lastly, the evidence attests to the short-run non-neutrality of money on unemployment, and to the stabilizing influence of the private sector on the economy.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 19
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:14122

DOI: 10.22004/ag.econ.14122

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