What Have We Learned from Empirical Tests of the Monetary Transmission Effect

Stefan Norrbin

No 121, Working Paper Series from Sveriges Riksbank (Central Bank of Sweden)

Abstract: The transmission effect of money has been a frequently debated issue. This paper discusses the empirical literature examining the effect of money on real output. In contrast to the commonly held belief that money has a powerful effect on output, most empirical tests of money shows relatively minor, but persistent effects. This is especially true for the extensive VAR literature. The paper focuses on the potential problems and issues that researchers have to account for when designing the empirical tests of the effects of monetary policy. Hopefully this paper will help in generating some discussion about the future direction of the empirical literature.

Keywords: Monetary transmission mechanism; Effects of monetary policy (search for similar items in EconPapers)
JEL-codes: E50 E52 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2001-02-01
New Economics Papers: this item is included in nep-cba and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:rbnkwp:0121

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