Ghiani, Giulia; Gillman, Max; Kejak, Michal - Department of Economics, University of Missouri-St. Louis - 2014
The paper sets out theory and evidence for the equilibrium determination of the nominal interest rate. We test the cash-in-advance economy using US postwar data and find cointegration of the interest rate, inflation, unemployment and the money supply, using either M2 or M1 monetary aggregates,...
