JOURNAL ARTICLE
Cite JOURNAL ARTICLE
Style
Format
On the Empirical Existence of a Monetarisi Steady State
Credit and Capital Markets – Kredit und Kapital, Vol. 14 (1981), Iss. 3 : pp. 350–383
Additional Information
Article Details
Moosa, Suleman A.
References
-
Almons, S.: “The Distributed Lag Between Capital Appropriations and Expenditures”, Econometrica, January, 1965, vol. 30, pp. 178 - 196.
Google Scholar -
Arrow, K.: “The Future and the Present in Economic Life”, Economic Inquiry, April 1978.
Google Scholar -
Barro, R. and F. Fischer: “Recent Developments in Monetary Theory”, Journal of Monetary Economics, 2, April 1976.
Google Scholar -
Box, G.E.P. and G.M. Jenkins: Time Series Analysis: Forecasting and Control, revised edition, San Francisco: Holden Day, 1976.
Google Scholar -
Brunner, K.: “The ‘Monetarist Revolution in Monetary Theory”, Weltwirtsch. Arch., 1970, 105 (1).
Google Scholar -
Cochrane, D. and G. Orcutt: “Application of Least Squares to Relationships Containing Autocorrelated Error Terms”, Journal of the American Statistical Association, 44 (1949), pp. 32-61.
Google Scholar -
Friedman, M.: “What Price Guideposts”, in Guidelines: Informal Controls and the Market Place, ed. by G.P. Schultz and R.F. Aliber (University of Chicago Press, Chicago 1966).
Google Scholar -
Friedman, M.: “Factors Affecting the Level of Interest Rates”, Proceedings of the 1968 Conference on Savings and Residential Financing, sponsored by the United States Savings and Loan League.
Google Scholar -
Friedman, M.: “A Theoretical Framework of Monetary Analysis”, Journal of Political Economy, March/April 1970, 78(2).
Google Scholar -
Friedman, M.: “A Monetary Theory of Nominal Income”, Journal of Political Economy, March/April 1971, 79 (2).
Google Scholar -
Friedman, M.: “Money and Inflation”, Newsweek, September 20, 1976.
Google Scholar -
Friedman, M.: “Inflation and Unemployment”, Journal of Political Economy, vol. 85, no. 3, 1977.
Google Scholar -
Friedman, M.: “Inflation and Recession”, Newsweek, April 24, 1978.
Google Scholar -
Friedman, B.: “The Theoretical Nondebate about Monetarism”, in Thomas Mayer, The Structure of Monetarism, (W. W. Norton and Company, 1978).
Google Scholar -
Frisch, H.: “Inflation Theory 1963 - 1975: A ‘Second Generation’ Survey”, Journal of Economic Literature XV, 4, December, 1977.
Google Scholar -
Gibson, W.: Interest Rates and Monetary Policy”, Journal of Political Economy, 78, 3, May/June 1970.
Google Scholar -
Goldfeld, S.: “The Demand of Money Revisited”, Brookings Papers on Economic Activity, 3, 1973.
Google Scholar -
Goldfeld, S.: “The Case of Missing Money”, Brookings Papers on Economic Activity, 2, 1977.
Google Scholar -
Hicks, J.: “Some Question of Time in Economics”, in Evolution, Welfare and Time in Economics: Essays in honor of Nicholas Georgescu-Roegen. Edited by A.M. Tang, F.M. Westerfield and J.S. Worley, Lexington, Mass: Heath, Lexington Books, 1976 pp. 133 - 157.
Google Scholar -
Johnson, H.: “Recent Developments in Monetary Theory - A Commenatry”, in Money in Britain, 1959 - 1969, ed. by D.R. Croome and H.G. Johnson (Oxford University Press, 1970).
Google Scholar -
Laidler, D.: “Money and Money Income: An essay on the ‘transmission mechanism’, Journal of Monetary Economics, April 1978.
Google Scholar -
Logue, D. and Willet, T.: “A Note of the Relation Between the Mean and the Variability of Inflation”, Economica, 43, 1976.
Google Scholar -
Mayer, T.: The Structure of Monetarism, (W.W. Norton, New York, 1978).
Google Scholar -
Modigliani: “The Monetarist Controversy or, Should We Forsake Stabilization Policy”, American Economic Review, March 1977.
Google Scholar -
Moosa, S. A.: “Dynamic Portfolio-Balance Behavior of Time Deposits and ‘Money’”, Journal of Finance (June 1977 a).
Google Scholar -
Moosa, S. A.: “The Behavior of Velocity”, Working Paper 77-09 CBA, University of Illinois at Chicago Circle, 1977 b.
Google Scholar -
Moosa, S. A.: “The Ability to Anticipate Inflation”, Working Paper 78-10, CBA, University of Illinois at Chicago Circle, 1978.
Google Scholar -
Moosa, S. A.: “The Dynamics of Interest Rate Adjustment in Response to Monetary and Fiscal Changes”, Eastern Economic Journal, IV, 1979.
Google Scholar -
Park, Y. C.: “Some Current Issues on the Transmission Process of Monetary Policy”, Staff Papers, International Monetary Fund (March 1972).
Google Scholar -
Robinson, J.: “What are the Questions”, Journal of Economic Literature, December 1977.
Google Scholar -
Seidman, L.: “The Role of a Tax-Based Incomes Policy”, American Economic Review, May 1979.
Google Scholar -
Slovin, M. and Sushka, E. M.: “The Structural Shift in the Demand for Money”, Journal of Finance, June 1975.
Google Scholar -
Tobin, J.: “Money and Income: Post Hoc Ergo Propter Hoc”, Quarterly Journal of Economics, (May 1970), 84, pp. 301 - 317.
Google Scholar -
Vining, D. R. and Elwertowski, T. C.: “The Relationship Between Relative Prices and the General Price Level”, American Economic Review, September 1976.
Google Scholar -
Weintraub, S.: “Capitalism’s Inflation and Unemployment Crisis”, Addison-Wesley, 1978.
Google Scholar
Abstract
On the Existence of a Monetarist Steady State
The worldwide acceleration of inflation over the last decade has been associated with (and apparently responsible for) an ascendancy of the Monetarist school of thought. Monetarist-inspired models make a sharp distinction between nominal and real variables and rely heavily, in line with Classical tradition, on steady state solutions to draw inferences about economic policy. Accordingly, both the existence of a particular steady state, and the rate of convergence of economic variables to (or the extent and nature of their departure from) their steady state values become of not inconsiderable interest. That is especially the case if the rate of time preference is positive. A variable of particular interest is the behavior of velocity growth. Even though Monetarist models differ in some matters of detail they all, explicitly or implicitly, assign a pivotal role to the behavior of velocity growth. It is assumed to equal zero or a technologically-determined constant in steady state equilibrium. By contrast, alternative models, say of unemployment, economic growth or inflation, explicity or implicity, have velocity growth take on (behaviorally-explained) non-constant values. This paper examines the steady state and related properties of velocity growth by using Friedman’s widely discussed Monetarist model as the point of departure.