DOES MONEY STILL MATTER?

Money is broadly defined to include M2 plus large denomination time deposits and deposits in savings institutions. Splitting M2+ into two components, M1 and the remainder, MD, each was found to bear a stable relationship to GDP over the 1929-94 period. An economic test of the causality question reveals that it runs from money to economic activity. Lastly, the evidence attests to the short-run non-neutrality of money on unemployment, and to the stabilizing influence of the private sector on the economy.


Issue Date:
1997
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/14122
Total Pages:
19
Series Statement:
Staff Paper P97-01




 Record created 2017-04-01, last modified 2017-04-04

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