We assess the bivariate relation between money growth and inflation in the euro area and the United States using hybrid time-varying parameter Bayesian VAR models. Model selection based on marginal likelihoods suggests that the relation is statistically unstable across time in both regions. The...

This paper compares the performance of a four methods of seasonal adjustment for monthly monetary aggregates. The methods compared are 1. GLAS - the method currently employed by the Bank. 2. STL - a recently developed flexible non-parametric adjustment method. 3. X-11 ARIMA (a slightly modified...

This paper develops a business cycle model with a financial intermediation sector. Financial wealth is defined as a predetermined state variable. Both, the additional sector of financial intermediaries and redetermination of financial wealth, affect the demand for real financial wealth. If real...

This paper reconsiders the empirical evidence on the asymmetric output effects of monetary policy. Asymmetric effects is a common feature of many theoretical models, and there are many different versions of such asymmetries. We concentrate on the distinctions between positive and negative...

Recent developments in macroeconomics, and in economic policy in general, have produced a "new consensus" economy-wide model, in which the stock of money does not play any causal role, but operates as a mere residual in the economic process. The absence of the stock of money in many current...

In this study, we compare simple sum and Divisia monetary aggregates under a Taylor rule formation for the U.S. economy to figure out if there exists any improvement in the estimation of inflation and output when a theoretically convincing definition of money i.e., Divisia money, is utilized....

This paper introduces an empirical measure of the cost of allocating money market volatility between the money stock and the Federal funds rate, the principal purpose being to devise a framework for data-based measures of the short-run implied by alternative operating procedures

This study re-investigates the money supply determination process for Japan. The methodology of this study, which differs from previous studies, is constructed on the assumption of potential nonlinear (asymmetric) relations between money supply and monetary base via money multiplier. To this...