In the P-star model the price level is determined by the money stock per unit of potential output and the long …-run equilibrium level of the velocity of money. This article applies this model to Austria. Problems in identifying permanent shocks …-difference version is not so suspect. While evidence is found of a long-run relationship between Austria inflation and money growth, even …

This paper revisits the issue of money growth versus the interest rate as the instrument of monetary policy. Using a … of inflation relative to money growth depends on whether the central bank follows a money growth rule or an interest rate … rule. With a money growth rule, inflation is not persistent and the price level is much more volatile than the money supply …