TY  - JOUR
AU  - Ramey,Valerie A.
TI  - The Source of Fluctuations in Money:  Evidence From Trade Credit
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3756
PY  - 1991
Y2  - June 1991
UR  - http://www.nber.org/papers/w3756
L1  - http://www.nber.org/papers/w3756.pdf
N1  - Author contact info:
Valerie A. Ramey
Department of Economics, 0508
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/534-2388
Fax: 858/534-7040
E-Mail: VRAMEY@UCSD.EDU
AB  - This paper tests the importance of technology shocks versus financial shocks for explaining, fluctuations in money. The model presented extends the theory of King and Plosser by recognizing that both money and trade credit provide transactions services. The model shows that the comovements between money and trade credit can reveal the nature of the underlying shocks. The empirical results strongly suggest that shocks to the financial system account for most of the fluctuations in money. Thus, the results cast doubt on the hypothesis that nonfinancial technology shocks are the main source of the money-income correlation.
ER  -