Money Still Matters
نویسندگان
چکیده
The workhorse of modern macroeconomics is the New Keynesian model. This model assumes that monetary policy is transmitted through the path of the shortterm nominal interest rate. Money, if it is included at all, is relegated to an inconsequential role in monetary policy analysis. The purpose of this paper is twofold. First, we summarize the literature on the existence and role of money that is ignored in the New Keynesian models. Second, we discuss the importance of properly measuring monetary aggregates. These aggregates are then used to empirically examine the significance of money, both generally and in regards to the so-called Great Recession. Finally, we conclude by discussing promising alternatives to modeling money. 1 Western Kentucky University, Department of Economics, 423 Grise Hall, 1906 College Heights Blvd. #11056 Bowling Green, Kentucky 42101 [email protected] 2 University of Mississippi, Department of Economics, 229 North Hall, University, MS, 38677 [email protected]
منابع مشابه
Indeterminacy of equilibrium allocations in monetary open economies 1
In an open economy, outside money in positive supply does not eliminate the real indeterminacy which arises under uncertainty and incomplete asset markets. If money supply is subject to shocks or is not perfectly credible in all countries, the level of a fixed exchange rate matters. Analogous results obtain in cash in advance models.
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