Money's Role in the Monetary Business Cycle

Peter Ireland

No 458, Boston College Working Papers in Economics from Boston College Department of Economics

Abstract: A small, structural model of the monetary business cycle implies that real money balances enter into a correctly-specified, forward-looking IS curve if and only if they enter into a correctly-specified, forward-looking Phillips curve. The model also implies that empirical measures of real balances must be adjusted for shifts in money demand to accurately isolate and quantify the dynamic effects of money on output and inflation. Maximum likelihood estimates of the model's parameters take both of these considerations into account, but still suggest that money plays a minimal role in the monetary business cycle.

Keywords: Money; Business Cycles; New Keynesian Models (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2000-04-10
New Economics Papers: this item is included in nep-mon
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Money's Role in the Monetary Business Cycle (2004)
Working Paper: Money's Role in the Monetary Business Cycle (2001)
Software Item: Matlab code for Money's Role in the Monetary Business Cycle (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:boc:bocoec:458

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