EconPapers    
Economics at your fingertips  
 

Money in an Estimated Business Cycle Model of the Euro Area

Javier Andrés (), David Lopez-Salido () and Javier Valles

No 121, Working Papers from Banco de España, Working Papers Homepage

Abstract: We present maximum likelihood estimates of a small scale dynamic general equilibrium model for the Eurozone. We pay special attention to the role of money, both through its direct effect upon private agents’ decisions and as a component of the monetary policy rule. Our results can be summarized as follows. First, we find no direct effect of money upon inflation and output but money growth plays a significant role in the interest rate rule. Second, money demand shocks mainly help to forecast real balances while real shocks explain the bulk of price, output and interest rates fluctuations. Third, the estimated model predicts sensible conditional correlations among those variables both to demand and supply disturbances. Finally, the systematic response of interest rates to money growth does not seem to have affected the output-inflation variability trade-off.

Pages: 37 pages
Date: 2001-12
References: View complete reference list from CitEc
Citations: View citations in EconPapers (18) Track citations by RSS feed

Downloads: (external link)
http://www.bde.es/f/webbde/SES/Secciones/Publicaci ... o/01/Fic/dt0121e.pdf First version, December 2001 (application/pdf)

Related works:
Journal Article: Money in an Estimated Business Cycle Model of the Euro Area (2006) 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:bde:wpaper:0121

Access Statistics for this paper

More papers in Working Papers from Banco de España, Working Papers Homepage Contact information at EDIRC.
Bibliographic data for series maintained by María Beiro. Electronic Dissemination of Information Unit. Research Department. Banco de España ().

 
Page updated 2020-08-03
Handle: RePEc:bde:wpaper:0121