Unanticipated Money, Output, and the Price Level in the United States

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Unanticipated Money, Output, and the Price Level in the United States

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Title: Unanticipated Money, Output, and the Price Level in the United States
Author: Barro, Robert J.
Citation: Barro, Robert J. 1978. Unanticipated money, output, and the price level in the United States. Journal of Political Economy 86(4): 549-580.
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Abstract: Earlier analysis of unanticipated money growth is extended to output (GNP) and the price level (GNP deflator) for recent U.S. experience. Price level determination is more complicated than output determination, because both anticipated and unanticipated money movements are involved. Empirical results accord well with the model-notably, they support the key hypothesis of a one-to-one, contemporaneous link be- tween anticipated money and the price level. Precise estimates are obtained for the lagged responses of output and prices to unanticipated money movements. Cross-equation comparisons indicate that the price response to unanticipated money movements has a longer lag than the output response. A form of lagged adjustment in money demand can account for this difference. The forecasts for inflation average 5.5 percent per year for 1977-80.
Published Version: doi:10.1086/260699
Terms of Use: This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page: http://nrs.harvard.edu/urn-3:HUL.InstRepos:3450988

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  • FAS Scholarly Articles [6466]
    Peer reviewed scholarly articles from the Faculty of Arts and Sciences of Harvard University
 
 

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