iran’s economy has experienced an average inflation rate of 18.77 percent during the period of 1979-2010. many economists believe that the budget deficits are one of the main determinants of the chronic and relatively high inflation. this paper investigates the relationship between budget deficits and inflation. dynamics of iran’s monetary sector, based on the three cointegration relations i.e....

This paper reviews the usefulness of monetary conditions in the euro area as leading indicators for aggregate demand conditions. Monetary conditions are measured with the MCI concept proposed by the Bank of Canada, and with the yield spread. A central result is that causality runs in both ways between monetary and aggregate demand conditions. The endogeneity of monetary conditions raises import...

Based on the “Aggregate Demand” theory, monetary policies are designed with the aim of achieving desirable level of macroeconomic goals through affecting the stock of money supplyand income velocity of money. Thus, the velocity (V)-as well as money supply - has significant impact, particularly on rate of inflation through expansionary or contractionary monetary policy. To focus on the velocity ...

This paper discusses the effects of asset price volatility on loan and aggregate output in a utility-based approach. In a real dynamic economy with heterogeneous agents, the creditdebt relationship is endogenously determined, given that borrowers are more productive but subject to collateral constraints. Resource allocation among borrowers and lenders affects the aggregate output as well as ass...

The stable money demand function is a crucial policy tool of the monetary any central bank, which links sector an economy to its real sector. Notably, after global financial crisis 2007–08, role has come be envisaged as essential issue while formulating and conducting policy, especially at zero lower bound. It know whether for inferring sound policy. To this end, present study examines short- l...

This study investigates the stability issues of real money balances considering financial development. We estimate narrow (M1) and broad (M3) demand in India during post-financial reform, from 1996:Q2 to 2016:Q3. To check short- long-run relationships, this uses autoregressive distributed lag model cointegration other various time series techniques. After incorporating development into demand, ...

This paper examines the relationship between unemployment and immigration in Canada. The bidirectional causality test finds no evidence of a significant effect of Canadian immigration on unemployment. Cointegration tests indicate that there is no observed increase in aggregate unemployment due to immigration in the long run. The results from the causality test based on the vector error correcti...

This paper examines aggregate money demand relationships in five industrial countries by employing a two-step strategy for testing the null hypothesis of no cointegration against alternatives which are fractionally cointegrated. Fractional cointegration would imply that, although there exists a long-run relationship, the equilibrium errors exhibit slow reversion to zero, i.e. that the error cor...

Since 2007, many monetary authorities have drastically changed its monetary policy. They began an aggressive struggle with the biggest economic crisis since the Great Depression. Despite the substantial decline in Central banks interest rates in US and EMU and despite the sharp easining of monetary policy in many other countries, the cost of credit to both households and businesses has generall...