This paper evaluates quantitatively the effect of real money balances in a New Keynesian framework. Money in our model facilitates transactions and is introduced through a transactions cost technology. This technology acts like a distortionary consumption tax which varies endogenously with the nominal interest rate. In this setup the resultant Phillips curve becomes a function of the nominal in...

This paper provides an empirical exploration of the interaction between fiscal policy, monetary policy, exchange rates, and external balances as well as their impacts on real economic growth and inflation for the BRICS countries. A panel VAR model is employed to assess the dynamic relationships. Our results generally confirm the significant impacts of a monetary shock on real economic activity ...

interest as investment opportunity cost or in other words cost of obtaining the credit requirement in the production process, have a key role in the good's cost price and hence it's necessary to control this kind of variables that have harmful effects on the interest rate's trends. among this, the unexpected changes in some variables that can have destructive effects on interest ...

Theories on the relationship between money and inflation had largely been shaped around the positive relationship and money causality for inflation before the Post-Keynesians. Since the 1980s, this idea emerged that there might be no correlation between money growth and inflation. In the case of existence, the causality is reversed, so money is endogenous somehow. However, practically there is ...

We develop a monetary model that is unique in its ability to deliver a negative correlation between aggregate consumption growth and short-term real interest rates consistent with U.S. data. The essential ingredient to this success is endogenous asset market segmentation permitting the extent of household participation in asset markets to vary smoothly with changes in aggregate conditions. Hous...

One of the striking features of the business cycles is the patterns of co-movement of output, inflation, interest rates, and real equity prices across countries. This paper empirically examines the effects of domestic and foreign monetary policies on Iranchr('39')s macroeconomic variables (including real production, inflation, short-term interest rate, and real exchange rate) using quarterly da...

The aim of this paper is to know how well a money-in-the-utility function model with a Taylor rule is able to match Chilean data, specially some monetary stylized facts. A dynamic stochastic general equilibrium model is formulated, solved and calibrated to evaluate its abilities to replicate the main features of the Chilean economy in the 1986-2000 period. In particular, I focus the attention o...

Even though theorists acquiesce to the liquidity effect as a theoietical proposition, it is often challenged on efficacy grounds. It is argued that changes in the money stock do not leave all other things unchanged. Monetarists, such as Friedman (1968) assert that the liquidity effect is, at best, only temporary; the ultimate effect of more rapid money growth is higher inflation (or, mom-c impo...