ON THE CORRELATION OF NOMINAL MONEY AND REAL OUTPUT: A SIMPLE CROSS-COUNTRY ANALYSIS

• Authors: Duczynski Petr
• Languages of publication: EN

Abstracts

EN

The relationship between real and nominal variables is a fundamental problem in macroeconomics. This study examines correlations of nominal monetary aggregates (the monetary base, M1, and M2) and real output in a broad sample of countries in the 1975-2000 period. On average we typically observe small but statistically significantly positive correlations. For the monetary base and M1, there is a tendency of money changes to precede output changes since the half lag in money is more strongly correlated with output than the half lead in money; M1 and M2 are more strongly associated with real output than the monetary base. In high-inflation countries, the given correlations are typically negative, which indicates a possibility that very high money growth is harmful for the growth of real output.

Keywords

EN

CORRELATION COEFFICIENTS; GROWTH RATES; MONEY GROWTH; NOMINAL MONETARY AGGREGATES

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2006
• Volume: 54
• Issue: 2
• Pages: 126-138
• Document type: ARTICLE

Contributors

author

Duczynski Petr

• P. Duczynski, Ekonomický ústav SAV, Sancová 56, 811 05 Bratislava 1, Slovak Republic

Identifiers

CEJSH db identifier

06SKAAAA01152669