The Effects of Unanticipated Money Growth on Prices and on Output and Its Composition in a Fixed-Exchange-Rate Open Economy

Bléjer, Mario I.; Fernández, Roque B.

doi:10.2307/134621

Cited by 27 publications

(17 citation statements)

References 10 publications

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“…Hanson (1980) Leiderman (1979), Blejer and Fernandez (1980) and Darby (1982). Barro (1978) is important to note that the use of equations of this type to generate expectations of money growth implicitly assumes that their parameters are stable through the period.…”

Section: Footnotesmentioning

confidence: 99%

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The Short-Run Relation Between Inflation and Growth in Latin America

Edwards¹

1983

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This paper investigates the relationship between monetary policy and growth in five Latin American countries (Brazil, Chile, Colombia, Mexico and Peru). The analysis focuses on the effects of expected and unexpected monetary growth on output, and explicitly incorporates the relationship between fiscal deficits and money creation in these countries. Open economy considerations are explicitly introduced into the analysis. Contrary to previous findings (Hanson, 1980), the results obtained in this paper indicate that these countries exhibit very different behavior with respect to the relationship between unexpected money and growth: While for Chile and Brazil no evidence was found of a positive relation between monetary policy (expected or unexpected) and growth, for Colombia, Mexico and Peru a positive relationship was found between unexpected monetary policy and growth.

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Section: Footnotesmentioning

confidence: 99%

“…--" Blejer and Fernandez (1980), in a study on Mexico that distinguishes between tradable and non-tradable goods, have found a positive effect of unexpected increases in domestic credit on non-tradables output.…”

Section: Footnotesmentioning

confidence: 99%

The Short-Run Relation Between Inflation and Growth in Latin America

Edwards¹

1983

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“…The open-economy classical model to be described here can be viewed as a successor to the "dependent economy" model developed by Blejer and Fernandez (1980). The present version differs from its predecessor only in its specification of aggregate demand.…”

Section: The Modelmentioning

confidence: 99%

“…1 Barro's original closed-economy formulation considered money (M1) to be the relevant monetary policy instrument, and others have done likewise in the developing-country setting. It has frequently been argued, on the other hand, that since the money supply cannot be considered to be under the control of the authorities in a small open economy which pegs its exchange rate, even in the short run, the appropriate monetary policy variable in such equations should be domestic credit (Blejer and Fernandez 1980, Edwards 1983a, 1983b This note demonstrates that, contrary to both views, neither money nor domestic credit belongs in reduced-form output equations under these circumstances. The reason is a familiar Mundellian one --under fixed exchange rates and perfect capital mobility, monetary policy is powerless to affect output (Mundell 1963).…”

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confidence: 93%

Money versus credit in the determination of output for small open economies

Montiel

1991

Open Econ Rev

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It is well known that in a small open economy where there is perfect substitutability between domestic and foreign assets and costless portfolio adjustment, the monetary authorities, pursuing an exchange-rate target, cannot control the money supply, but can influence the balance of payments through the use of domestic credit. It has been argued that domestic credit is therefore the relevant variable in output determination as well. This paper demonstrates, however, using a â€œnew classicalâ€ structural model, that under the conditions that render the money supply uncontrollable, neither money nor domestic credit affects output. Copyright Kluwer Academic Publishers 1991small open economy, balance of payment adjustment, money, domestic credit,

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“…Although this perspective is recently intensively discussed in many applied fields from geochemistry and chemometrics to social sciences (Pawlowsky-Glahn and Buccianti 2011), just a few papers were published with purely an economic motivation (see Fry 2011, and references therein). On the contrary, even when the authors are aware of relative nature of the underlying economic data, this feature is mostly not (or just sloppily) taken into account for the statistical analysis (Blejer and Fernandez 1980;Devarajan, Swaroop, and Zou 1996).…”

Section: Introductionmentioning

confidence: 99%

Compositional analysis of trade flows structure

Hrůzová

Rypka

Hron

2017

AJS

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Statistical analysis of trade flows structure can significantly help to reveal or to confirm important macroeconomic phenomena. Because of relative character of these multivariate observations, application of standard multivariate methods directly to raw data can lead to meaningless results, affected by trade sizes of different countries. As a way out, it is proposed to employ the logratio methodology that is able to capture interesting features through logratios between compositional parts. Particularly, the perturbation operation together with clr coefficients for coordinate representation of compositions seem to be easy to handle and to interpret for the purpose. Popular exploratory tools, principal component analysis and PARAFAC modeling of three-way data, resulting from a longterm study of the export/import structure, are applied in the compositional context for data from OECD and WIOD databases. The results show that the logratio methodology enables to reveal interesting features of world trade flows and thus provides a preferable alternative to existing exploratory tools.

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The Effects of Unanticipated Money Growth on Prices and on Output and Its Composition in a Fixed-Exchange-Rate Open Economy

Cited by 27 publications

References 10 publications

The Short-Run Relation Between Inflation and Growth in Latin America

The Short-Run Relation Between Inflation and Growth in Latin America

Money versus credit in the determination of output for small open economies

Compositional analysis of trade flows structure

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