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Money and Liquidity Effects: Separating Demand from Supply

Chadha, Jagjit S., Corrado, Luisa, Sun, Qi (2010) Money and Liquidity Effects: Separating Demand from Supply. Journal of Economic Dynamics and Control, 34 (9). pp. 1732-1747. ISSN 0165-1889. (doi:10.1016/j.jedc.2010.06.020) (The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided) (KAR id:40228)

The full text of this publication is not currently available from this repository. You may be able to access a copy if URLs are provided.
Official URL:
http://dx.doi.org/10.1016/j.jedc.2010.06.020

Abstract

In the canonical monetary policy model, money is endogenous to the optimal path for interest rates and output. But when liquidity provision by banks dominates the demand for transactions money from the real economy, money is likely to contain information for future output because of its impact on financial spreads. And so we decompose broad money into primitive demand and supply shocks. We find that supply shocks have played a significant role in the time series in each of the USA, UK and Eurozone in the short to medium term. We further consider to what extent the supply of broad money is related to policy or to liquidity effects from financial intermediation.

Item Type: Article
DOI/Identification number: 10.1016/j.jedc.2010.06.020
Additional information: number of additional authors: 2;
Uncontrolled keywords: Money; Liquidity; Bayesian VAR identification; Sign restrictions
Subjects: H Social Sciences > HB Economic Theory
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Depositing User: Stewart Brownrigg
Date Deposited: 07 Mar 2014 00:05 UTC
Last Modified: 16 Nov 2021 10:15 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/40228 (The current URI for this page, for reference purposes)

University of Kent Author Information

Chadha, Jagjit S..

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