Tests of long-run neutrality using permanent monetary and real shocks

Article Abstract:

Long-run monetary neutrality (LRMN) tests were developed using a multivariate and cointegration-based empirical framework. The framework considers real shock effects on the long-term properties of output and monetary aggregates. Results proved that LRMN existed in the post-World War II US economy. Permanent labor supply innovations measured by working-age population were found to have significant influences on long-term US output and monetary aggregate movements.

Labor supply, Labor force, Money supply

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Optimal monetary policy in an economy with incomplete markets and idiosyncratic risk

Article Abstract:

The study examines the influence of precautionary saving motives and borrowing constraints on incomplete markets economy, where agents can use interest bearing IOUs and money for smooth consumption. The study concludes that the Friedman rule is not optimal for the economy, and that the optimal allocation has a 10% rate of inflation.

Canada, Economic conditions, Study and teaching, Savings

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The Indicator Properties of the St. Louis Monetary Base

Article Abstract:

The monetary base used by the Federal Reserve Bank of St. Louis is examined and found to be a biased policy indicator. An alternative monetary base is suggested for constancy.

Economic policy, Federal Reserve banks

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