Money and Information in a New Neoclassical Synthesis Framework
Bibliographic Data
| ID | 9708136 |
|---|---|
| Authors | Philip Arestis (0000-0001-8729-4846, University of Cambridge), Georgios Chortareas (0000-0002-8901-9474, University of Athens and University of Essex), John D Tsoukalas (University of Nottingham) |
| Year | 2010 |
| Volume | 120 |
| Issue | 542 |
| Pages | F101-F128 |
| Publication date | 2010-02-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2009.02339.x |
| OpenAlex | W2048402289 |
| Language | EN |
| References cited | 42 |
We consider an (otherwise standard) New Neoclassical Synthesis theoretical framework that allows a role for money. Money in our model has an informational role which facilitates the estimation of the unobserved shocks that drive potential output and thus the state of the economy. For this purpose we estimate a small-scale sticky price model using Bayesian techniques. Our findings support the view that money has information value. This is reflected in higher precision in terms of unobserved model concepts such as the natural rate of output. Moreover, our results highlight how modelling money demand can provide insights about structural features of the economy that may be important for the design of interest rate rules. Focusing on money also allows for a step towards resolving the price puzzle. Money demand shocks can confound monetary policy shocks to generate a perverse price response in vector autoregressions (VAR). Copyright © The Author(s). Journal compilation © Royal Economic Society 2010
Bayesian probability · Demand for money · Econometrics · Economics · Endogenous money · Interest rate · Macroeconomics · Monetary economics · Monetary policy · Time value of money · Value (mathematics · Vector autoregression · Computer Science · Economic theories and models · Economic Theory and Policy · Monetary Policy and Economic Impact
Chapter 2 Monetary policy shocks
Monetary Policy Rules and Macroeconomic Stability
General Methods for Monitoring Convergence of Iterative Simulations
Output Fluctuations in the United States
An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area
Implications of rational inattention
Staggered prices in a utility-maximizing framework
Shocks and Frictions in US Business Cycles
Interpreting the macroeconomic time series facts
Limited Asset Market Participation and the Elasticity of Intertemporal Substitution
Nominal Rigidities and the Dynamic Effects of a Shock to Monetary Policy
What Level of Fixed Costs Can Reconcile Consumption and Stock Returns
Money in an Estimated Business Cycle Model of the Euro Area
| Citation velocity | historical |
|---|---|
| Highly cited | No |