The Demand for Assets and Optimal Monetary Aggregation PDF Download
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Author: Ali Jadidzadeh
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This paper uses a highly disaggregated demand system to estimate the degree of substitutability among monetary assets and to address the issue of optimal monetary aggregation in the United States. We address the problems of dimensionality and nonlinearity, estimating a very detailed monetary asset demand system encompassing the full range of assets based on the locally flexible normalized quadratic (NQ) expenditure function. We treat the concavity property as a maintained hypothesis and provide evidence consistent with neoclassical microeconomic theory. Statistical tests reject the appropriateness of the aggregation assumptions for all the money measures published by the Federal Reserve as well as for a large number of groupings suggested by earlier studies. This supports and reinforces Barnett's (2016) assertion that we should employ the broadest M4 monetary aggregate published by the Center for Financial Stability.
Author: Ali Jadidzadeh
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
This paper uses a highly disaggregated demand system to estimate the degree of substitutability among monetary assets and to address the issue of optimal monetary aggregation in the United States. We address the problems of dimensionality and nonlinearity, estimating a very detailed monetary asset demand system encompassing the full range of assets based on the locally flexible normalized quadratic (NQ) expenditure function. We treat the concavity property as a maintained hypothesis and provide evidence consistent with neoclassical microeconomic theory. Statistical tests reject the appropriateness of the aggregation assumptions for all the money measures published by the Federal Reserve as well as for a large number of groupings suggested by earlier studies. This supports and reinforces Barnett's (2016) assertion that we should employ the broadest M4 monetary aggregate published by the Center for Financial Stability.
Author: Apostolos Serletis
Publisher: Springer Science & Business Media
ISBN: 1475733208
Category : Business & Economics
Languages : en
Pages : 305
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Book Description
Almost half a century has elapsed since the demand for money began to attract widespread attention from economists and econometricians, and it has been a topic of ongoing controversy and research ever since. Interest in the topic stemmed from three principal sources. First of all, there was the matter of the internal dynamics of macroeco nomics, to which Harry Johnson drew attention in his 1971 Ely Lecture on "The Keynesian Revolution and the Monetarist Counter-Revolution," American Economic Review 61 (May 1971). The main lesson about money that had been drawn from the so-called "Keynesian Revolution" was - rightly or wrongly - that it didn't matter all that much. The inherited wisdom that undergraduates absorbed in the 1950s was that macroeconomics was above all about the determination of income and employment, that the critical factors here were saving and investment decisions, and that monetary factors, to the extent that they mattered at all, only had an influence on these all important variables through a rather narrow range of market interest rates. Conventional wisdom never goes unchallenged in economics, except where its creators manage to control access to graduate schools and the journals, and it is with no cynical intent that I confirm Johnson's suggestion that those of us who embarked on academic careers in the '60s found in this wisdom a ready-made target.
Author: Piyu Yue
Publisher:
ISBN:
Category : Demand for money
Languages : en
Pages : 148
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Book Description
Author: Paul A. Spindt
Publisher:
ISBN:
Category : Money supply
Languages : en
Pages : 72
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Book Description
Author: Richard T. Froyen
Publisher: Edward Elgar Publishing
ISBN: 1784717193
Category : Mathematical optimization
Languages : en
Pages : 466
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Book Description
This book provides a thorough survey of the model-based literature on optimal monetary in a stochastic setting. The survey begins with the literature of the 1970s which focused on the information problem in policy design and extends to the New Keynesian approach of the 1990s which centered on evaluating alternative targeting strategies. New to the second edition is consideration of research since the world financial crisis on the role of financial markets and institutions in the conduct of monetary policy.
Author: Apostolos Serletis
Publisher: World Scientific
ISBN: 9812568182
Category : Business & Economics
Languages : en
Pages : 352
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Book Description
This book provides a comprehensive and systematic introduction to the problem of the definition of money and investigates the gains that can be achieved by a rigorous use of microeconomic- and aggregation-theoretic foundations in the construction of monetary aggregates. It provides readers with key aspects of monetary economics and macroeconomics, including monetary aggregation, demand systems, flexible functional forms, long-run monetary neutrality, the welfare cost of inflation, and nonlinear chaotic dynamics.This book offers the following conclusions: the simple-sum approach to monetary aggregation and log-linear money demand functions, currently used by central banks, are inappropriate for monetary policy purposes; the choice of monetary aggregation procedure is crucial in evaluating the welfare cost of inflation; the inter-related problems of monetary aggregation and money demand will be successfully investigated in the context of flexible functional forms that satisfy theoretical regularity globally, pointing the way forward to useful and productive research.
Author: Ryadh M. Alkhareif
Publisher: Cambridge Scholars Publishing
ISBN: 144385333X
Category : Business & Economics
Languages : en
Pages : 145
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Book Description
In response to the recent financial crisis, many countries have initiated monetary stimulus packages. Maintaining proper measures of monetary aggregates is of particular importance for such economic policies. However, many central banks worldwide use the simple-sum monetary indexes, which ignore the liquidity characteristics of financial assets. Using the simple-sum indexes can produce misleading information, especially for broad monetary aggregates within which financial assets are not likely to be perfect substitutes. This book focuses on alternative economic stability indicators, and outlines the methods for constructing proper monetary and financial indicators – known as Divisia indexes. The Divisia monetary indexes are designed to measure accurately the liquidity in the economy by assigning different weights to different financial assets according to their usefulness in transactions. This book is highly relevant to economists interested in monetary policy and the construction of core inflation indicators and proper monetary indexes, in accordance with aggregation and index number theory. This book is the first to publish Divisia-based money supply indexes and core inflation indicators for the Gulf Cooperation Council (GCC) countries and for the Gulf Monetary Union. Researchers who use the financial data published by GCC central banks can use our indexes and findings to examine the interactions among the relevant macro-economic variables.
Author: William A. Barnett
Publisher: North-Holland
ISBN: 9780444860972
Category : Business & Economics
Languages : en
Pages : 866
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Book Description
Author: Helge Berger
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 66
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Book Description
Monetary aggregates continue to play an important role in the ECB's policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factors alone may leave the ECB with an incomplete picture of the economy. However, treating monetary factors as a separate matter is a second-best solution. Instead, a general-equilibrium inspired analytical framework that merges the economic and monetary "pillars" of the ECB's policy strategy appears the most promising way forward. The role played by monetary aggregates in such unified framework may be rather limited. However, an integrated framework would facilitate the presentation of policy decisions by providing a clearer narrative of the relative role of money in the interaction with other economic and financial sector variables, including asset prices, and their impact on consumer prices.
Author: John Y. Campbell
Publisher: University of Chicago Press
ISBN: 0226092127
Category : Business & Economics
Languages : en
Pages : 444
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Book Description
Economic growth, low inflation, and financial stability are among the most important goals of policy makers, and central banks such as the Federal Reserve are key institutions for achieving these goals. In Asset Prices and Monetary Policy, leading scholars and practitioners probe the interaction of central banks, asset markets, and the general economy to forge a new understanding of the challenges facing policy makers as they manage an increasingly complex economic system. The contributors examine how central bankers determine their policy prescriptions with reference to the fluctuating housing market, the balance of debt and credit, changing beliefs of investors, the level of commodity prices, and other factors. At a time when the public has never been more involved in stocks, retirement funds, and real estate investment, this insightful book will be useful to all those concerned with the current state of the economy.
