The Return of the Liquidity Effect: A Study of the Short-Run Relation Between Money Growth and Interest Rates
- 1 January 1989
- journal article
- research article
- Published by Taylor & Francis in Journal of Business & Economic Statistics
- Vol. 7 (1) , 75-83
- https://doi.org/10.1080/07350015.1989.10509715
Abstract
In this article, I use band-pass filters to investigate the short-run relationship between money growth and interest rates. I find a negative correlation between short-run movements in money growth and interest rates, which I interpret as evidence that the liquidity effect dominates the anticipated inflation effect.Keywords
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