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This paper presents new empirical evidence to support the hypothesis that positive money supply shocks drive short-term interest rates down. We then present a quantitative, general equilibrium model which is consistent with the hypothesis. The two key features of our model are that (i) money...
Persistent link: https://www.econbiz.de/10012474841
general equilibrium models, which allow for capital accumulation, are inconsistent with this view. There does exist a recently …
Persistent link: https://www.econbiz.de/10012475008
Conventional wisdom holds that unanticipated expansionary monetary policy shocks cause transient but persistent decreases in real and nominal interest rates. However a number of econometric studies argue that the evidence favors the opposite view, namely that these shocks actually raise, rather...
Persistent link: https://www.econbiz.de/10012475068