Liquidity Models in Open Economies: Theory and Empirical Evidence / Nouriel Roubini, Vittorio Grilli.

Format:

Book

Author/Creator:

Roubini, Nouriel.

Contributor:

National Bureau of Economic Research.

Grilli, Vittorio.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5313.

NBER working paper series no. w5313

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Liquidity Models in Open Economies

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1995.

Summary:

This paper presents an overview of recent theoretical and empirical research on 'liquidity models' in open economies; this is a class of optimizing models where money has effects on real asset prices and economic activity without relying on the 'ad-hoc' assumption of price/wage stickiness. The non-neutrality of money derives from a temporary segmentation between goods and asset markets. After surveying the theoretical literature on liquidity models, we present empirical evidence based on VAR econometric techniques for the seven major industrial countries. Such evidence is shown to be consistent with the main implications of the liquidity models.

Notes:

Print version record

October 1995.