Does Money Matter? An Empirical Investigation
James McGibany and
Farrokh Nourzad ()
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Barry Huston: Department of Economics Marquette University
James McGibany: Department of Economics Marquette University
Farrokh Nourzad: Department of Economics Marquette University
No 2010-09, Working Papers and Research from Marquette University, Center for Global and Economic Studies and Department of Economics
This paper uses a simultaneous-equations model of the new consensus macroeconomic model to examine whether the inclusion of the money stock in the aggregate demand function improves the statistical fit of the model. The results indicate that the consensus model is accurate for the U.S. in that the inclusion of money does not increase the predictive power of the model. However, the results reveal that the estimated coefficients are more robust when money is included as an instrumental variable in the simultaneous equations consensus model.
Keywords: consensus macro model; monetary policy; Phillips Curve; Taylor Rule; Economics (search for similar items in EconPapers)
JEL-codes: C30 C52 E32 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:mrq:wpaper:2010-09
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