Money growth volatility and the demand for money in Germany: Friedman's volatility hypothesis revisited
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چکیده
Recently the Bundesbank claimed that monetary targeting has become considerably more di cult by the increased volatility of short term money growth The present paper investigates the impact of German money growth volatility on income velocity and money demand in view of Friedman s money growth volatility hypothesis Granger causality tests provide some evidence for a velocity volatility linkage However the estimation of volatility augmented money demand functions re veals that in contrast to Friedman s hypothesis increased money growth volatility lowered the demand for money
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Money supply and velocity of money are important variables that affect inflation and product. Velocity of money is a key concept for economic policy, and it's getting more important since it is closely related to behavior of the demand for money. In this regard, Friedman believes that the volatility of money growth is the main factor of velocity of money, which in monetary economics literature ...
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Aguerre, R.B., Fuertes, A. M. and Phylaktis, K. (2012), "Exchange Rate Pass-through into Import Prices Revisited", Journal of International Money, 31: 818-844. Bailliu, J. & Fujii, E. (2004). "Exchange Rate Pass-Through and the Inflation Environment in Industrialized Countries: An Empirical Investigation", Bank of Canada Working Paper No. 21. Carlsson, M., Lyhagen, J., and Österholm, P. (2007)...
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