TY  - JOUR
AU  - Friedman,Benjamin M.
TI  - The Roles of Money and Credit in Macroeconomic Analysis
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 831
PY  - 1984
Y2  - 1984
UR  - http://www.nber.org/papers/w0831
L1  - http://www.nber.org/papers/w0831.pdf
N1  - Author contact info:
Benjamin M. Friedman
Department of Economics
Littauer Center 127
Harvard University
Cambridge, MA  02138
Tel: 617/495-4246
Fax: 617/495-7730
E-Mail: bfriedman@harvard.edu
AB  - This paper considers the implications, for macroeconomic modeling and for monetary policy, of the interrelationships among money, credit and nonfinancial economic activity. Data for the United States since World War II show that the volume of outstanding credit is as closely related to economic activity as is the stock of money, and moreover that neither money nor credit is sufficient to account fully for the effect of financial markets in determining real economic activity. Instead, what appears to matter is an interaction between money and credit. This result is consistent with a macroeconomic modeling strategy that deals explicitly with both the money market and the credit market, and with a monetary policy framework based on the joint use of a money growth target and a credit growth target.
ER  -