Paper #1242

Título:

Does money matter in shaping domestic business cycles? An international investigation (with appendices)

Autores:

Fabio Canova y Tobias Menz

Data:

Julio 2009

Resumen:

We study the contribution of money to business cycle fluctuations in the US, the UK, Japan, and the Euro area using a small scale structural monetary business cycle model. Constrained likelihood-based estimates of the parameters are provided and time instabilities analyzed. Real balances are statistically important for output and inflation fluctuations. Their contribution changes over time. Models giving money no role provide a distorted representation of the sources of cyclical fluctuations, of the transmission of shocks and of the events of the last 40 years.

Palabras clave:

Money, business cycles, shock transmission, inflation dynamics.

Códigos JEL:

E31, E32, E52.

Área de investigación:

Macroeconomía y Economía Internacional

Publicado en:

Journal of Money, Credit and Banking, 43(4), 577-609, 2011

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