Nkrumah, Kwabena Meneabe (2015): US Domestic Money, Output, Inflation and Unemployment.
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Abstract
The relationship between money and macroeconomic variables such as output, inflation and unemployment is the basis of macroeconomic policy piquing the interests of both academic economists and policy makers especially in the aftermath of the Great Recession. With the Federal Reserve expanding its balance sheet by an estimated $4 trillion, the current economic debate is whether there is a stable relationship between money and macroeconomic variables. In fact, previous research had shown that the link is tenuous and a more recent paper by Aksoy and Piskorski (2006) had concluded that accounting for the foreign holdings of US dollars holds predictive content for the path key macroeconomic variables such as output and inflation. This paper aimed to test this theory on a larger dataset including testing a small sample for the period after the Great Recession. I found that accounting for foreign holdings of US dollars improved the intrinsic information held in domestic money for the path of output after the great recession and the path of inflation between 1965-2007.
Item Type: | MPRA Paper |
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Original Title: | US Domestic Money, Output, Inflation and Unemployment |
English Title: | US Domestic Money, Output, Inflation and Unemployment |
Language: | English |
Keywords: | Currency, Money, Output, Inflation, Unemployment, Granger Causality, Forecasting |
Subjects: | E - Macroeconomics and Monetary Economics > E0 - General E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation: Models and Applications E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies |
Item ID: | 68095 |
Depositing User: | Mr Kwabena Meneabe Ackon |
Date Deposited: | 27 Nov 2015 09:46 |
Last Modified: | 27 Sep 2019 03:45 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/68095 |
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