The Source of Fluctuations in Money: Evidence From Trade Credit / Valerie A. Ramey.

Format:

Book

Author/Creator:

Ramey, Valerie A.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w3756.

NBER working paper series no. w3756

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Source of Fluctuations in Money

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1991.

Summary:

This paper tests the importance of technology shocks versus financial shocks for explaining, fluctuations in money. The model presented extends the theory of King and Plosser by recognizing that both money and trade credit provide transactions services. The model shows that the comovements between money and trade credit can reveal the nature of the underlying shocks. The empirical results strongly suggest that shocks to the financial system account for most of the fluctuations in money. Thus, the results cast doubt on the hypothesis that nonfinancial technology shocks are the main source of the money-income correlation.

Notes:

Print version record

June 1991.