Money Growth, Output Growth, and Inflation: Estimation of a Modern Quantity Theory

Moroney, John R.

doi:10.2307/1061679

Cited by 19 publications

(24 citation statements)

References 36 publications

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“…Figure 3 also shows lines for regressions of inflation on excess money growth. The slopes in these regressions also are used by some as a criteria for evaluating the usefulness of money as a predictor of inflation, with coefficients close to one being considered more supportive (Moroney, 2002;Frain, 2004;DeGrauwe and Polan, 2005). As the data are cut off at lower growth rates of excess money, the regression coefficients decrease, with the regression coefficients in this figure decreasing from 1.01 for all the data, to 0.99 for countries with excess money growth less than 50 percent, to 0.88 for countries with excess money growth less than 20 percent and to 0.41 for countries with excess money growth less than 10 percent.…”

Section: Some Evidence On Money Growth and Inflationmentioning

confidence: 99%

“…Lucas (1980), Lothian (1985), Hafer (1988, 1999), McCandless and Weber (1995), Rolnick and Weber (1997) and others find substantial correlations of money growth and inflation across countries for different time periods. Moroney (2002) and De Grauwe and Polan (2005) examine a common criticism of such analyses, namely that the correlations are driven by the high inflation countries and there is little relationship between money growth and inflation for low inflation countries. Moroney (2002) selects countries based on money growth rates and finds a positive relationship between money growth and inflation in low-money-growth countries, but the relationship is stronger and more striking when countries with higher money growth are included in the analysis.…”

Section: Introductionmentioning

confidence: 99%

“…Moroney (2002) and De Grauwe and Polan (2005) examine a common criticism of such analyses, namely that the correlations are driven by the high inflation countries and there is little relationship between money growth and inflation for low inflation countries. Moroney (2002) selects countries based on money growth rates and finds a positive relationship between money growth and inflation in low-money-growth countries, but the relationship is stronger and more striking when countries with higher money growth are included in the analysis. De Grauwe and Polan present evidence that the correlations are close to zero or zero for low inflation countries.…”

Section: Introductionmentioning

confidence: 99%

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Inflation and Monetary Regimes

Dwyer

Fisher

2009

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Correlations of inflation with the growth rate of money increase when data are averaged over longer time periods. Correlations of inflation with the growth of money also are higher when high-inflation as well as low-inflation countries are included in the analysis. We show that serial correlation in the underlying inflation rate ties these two observations together and explains them. We present evidence that averaging increases the correlation of inflation and money growth more when the underlying inflation rate has higher serial correlation. Terms of use: Documents inJEL classification: E31, E5

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Section: Some Evidence On Money Growth and Inflationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Inflation and Monetary Regimes

Dwyer

Fisher

2009

SSRN Journal

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“…Our argument is based on two studies by Moroney (2002) and DeGrauwe and Polan (2005) that test the one-on-one relationship between money and inflation in multi-country investigations. The former study separates countries into 'high-money-growth and high-inflation' and 'low-moneygrowth and low-inflation' categories.…”

mentioning

confidence: 99%

Political instability and inflation in Pakistan

Khan

Saqib

2011

Journal of Asian Economics

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This study investigates the effects of political instability on inflation in Pakistan. Applying the Generalized Method of Moments and using data from 1951-2007, we examine this link in two different models. The results of the 'monetary' model suggest that the effects of monetary determinants are rather marginal and that they depend upon the political environment of Pakistan.The 'nonmonetary' model's findings explicitly establish a positive association between measures of political instability and inflation. This is further confirmed on analyses based on interactive dummies that reveal political instability significantly leading to high (above average) inflation. JEL Codes:E31, E63

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“…Across the different countries examined, money accounts for more of the variance in real output than normal interest rates in about half of these countries. Moreover, Moroney [17] develops a long-run approach to examine the quantity of money growth, real GDP growth, and inflation. The results show that money growth and GDP growth are nearly orthogonal, consistent with long-run monetary super neutrality.…”

Section: The Relationship Between Money and Outputmentioning

confidence: 99%

Reinvestigating the Effect of Money on Output for Taiwan with Additional Robustness

Wu¹,

Ni²

2014

TEL

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This paper investigates the effect of money on output in Taiwan with more robustness concerns. First, we employ different lag-length chosen criteria, such as AIC, BIC, FPE, SBC, SIC, and HJC for the lag length chosen for Granger causality. Second, we use the symmetric and asymmetric lag length models for further investigation. Third, we employ the simulated data and real data for comparison. Fourth, we further compare the results derived from short-term data with those derived from long-term period data. After surveying the relevant literature, we find that these concerns seem rarely concerned in the relevant studies. In addition, our empirical results reveal that the money indeed affects output even after taking the concerns mentioned above for robustness, implying that policymakers should adopt monetary policies with care in Taiwan.

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Money Growth, Output Growth, and Inflation: Estimation of a Modern Quantity Theory

Cited by 19 publications

References 36 publications

Inflation and Monetary Regimes

Inflation and Monetary Regimes

Political instability and inflation in Pakistan

Reinvestigating the Effect of Money on Output for Taiwan with Additional Robustness

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