Endogenous Money or Sticky Prices?

Peter Ireland

No 9390, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: What explains the correlations between nominal and real variables in the postwar US data? Are these correlations indicative of significant nominal price rigidity? Or do they simply reflect the particular way that monetary policymakers react to developments in the real economy? To answer these questions, this paper uses maximum likelihood to estimate a model of endogenous money. This model allows, but does not require, nominal prices to be sticky. The results show that nominal price rigidity, over and above endogenous money, plays a role in accounting for key features of the data.

JEL-codes: E31 E32 (search for similar items in EconPapers)
Date: 2002-12
New Economics Papers: this item is included in nep-mon
Note: ME
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Citations: View citations in EconPapers (11)

Published as Ireland, Peter N. "Endogenous Money Or Sticky Prices?," Journal of Monetary Economics, 2003, v50(8,Nov), 1623-1648.

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Journal Article: Endogenous money or sticky prices? (2003)
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