Money and Income: A Changing Relationship

M.S. Monadjemi

Working Papers from New South Wales - School of Economics

Abstract: The effect of money on output has been changing during the past two decades. This paper attempts to examine the money-income relationship in Australia and the United States during the period of the 1960s-1990s as well as the 1960s-1970s. The empirical findings of the study, based on variance decomposition and impulse response functions show a weak long-run relationship between money and income for both countries when the sample period includes the decades of the 1980s and 1990s. This result may indicate temporary short-run changes in the relationship between money and income. However, over a long period of time money has a neutral effect on output.

Keywords: MONEY; INCOME; PRODUCTION; AUSTRALIA; UNITED STATES (search for similar items in EconPapers)
JEL-codes: E40 E66 (search for similar items in EconPapers)
Pages: 17 pages
Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:fth:nesowa:98-15

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