Two Illustrations of the Quantity Theory of Money Reloaded

Han Gao (), Mariano Kulish and Juan Pablo Nicolini

No 774, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: In this paper, we review the relationship between inflation rates, nominal interest rates, and rates of growth of monetary aggregates for a large group of OECD countries. We conclude that the low-frequency behavior of these series maintains a close relationship, as predicted by standard quantity theory models. In an estimated model, we show those relationships to be relatively invariant to alternative frictions that can deliver very different high-frequency dynamics. We argue that these relationships are useful for policy design aimed at controlling inflation.

Keywords: Money demand; Monetary aggregates; Monetary policy (search for similar items in EconPapers)
JEL-codes: E41 E51 E52 (search for similar items in EconPapers)
Pages: 61
Date: 2020-12-15
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Related works:
Working Paper: Two Illustrations of the Quantity Theory of Money Reloaded (2022)
Working Paper: Two Illustrations of the Quantity Theory of Money Reloaded (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:89164

DOI: 10.21034/wp.774

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