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A Cyeclical Interpretation of Money

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Allsbrook, O., Gilliam, K. A Cyeclical Interpretation of Money. Credit and Capital Markets – Kredit und Kapital, 21(2), 243-252. https://doi.org/10.3790/ccm.21.2.243
Allsbrook, Odgen O. and Gilliam, Kenneth P. "A Cyeclical Interpretation of Money" Credit and Capital Markets – Kredit und Kapital 21.2, 1988, 243-252. https://doi.org/10.3790/ccm.21.2.243
Allsbrook, Odgen O./Gilliam, Kenneth P. (1988): A Cyeclical Interpretation of Money, in: Credit and Capital Markets – Kredit und Kapital, vol. 21, iss. 2, 243-252, [online] https://doi.org/10.3790/ccm.21.2.243

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A Cyeclical Interpretation of Money

Allsbrook, Odgen O. | Gilliam, Kenneth P.

Credit and Capital Markets – Kredit und Kapital, Vol. 21 (1988), Iss. 2 : pp. 243–252

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Article Details

Author Details

Prof. Odgen O. Allsbrook, The University of Georgia, Department of Economics, Brooks Hall, Athens, Georgia 30602, USA

Prof. Kenneth P. Gilliam, The University of Georgia, Department of Economics, Brooks Hall, Athens, Georgia 30602, USA

References

  1. Allsbrook, O. O.: "Keynes' Involuntary Unemployment Equilibrium: An Alternative View," South African Journal of Economics, 41, March 1973, pp. 60 - 66.  Google Scholar
  2. Allsbrook, O. O.: "Real Velocity and Crowding-In," South African Journal of Economics, 54, June 1986, pp. 222 - 224.  Google Scholar
  3. Conard, Joseph W.: The Behavior of Interest Rates (New York: Columbia University Press for NBER, 1966).  Google Scholar
  4. Kessel, Reuben: The Cyclical Behavior of the Term Structure of Interest Rates, Occasional Paper 91 (New York: NBER, December 1965).  Google Scholar
  5. Malkiel, Burton Gordon: The Term Structure of Interest Rates: Expectations and Behavior Patterns, (Princeton: University Press, 1966).  Google Scholar

Abstract

A Cyclical Interpretation of Money

This article develops a cyclical analysis of velocity as it varies over a stylized business cycle. Velocity varies historically in a predictable cyclical fashion, so the IS-LM paradigm is employed to illustrate why these changes are expected. A critical distinction lies in the difference between the stock of money and the flow of money. The former is exogenous, while the latter is endogenous and includes changes in velocity. The two phases of the cycle rationalized in this manner are disinflation and accelerating inflation. The expected effects on yield curves during these phases are drawn. Thus an attempt is made to subject the financial side of the economy (LM) to the same flexibility that the expenditure side of the economy (15) has been subjected by the alternative consumption/saving hypotheses.