TY  - JOUR
AU  - Roubini,Nouriel
AU  - Grilli,Vittorio
TI  - Liquidity Models in Open Economies: Theory and Empirical Evidence
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5313
PY  - 1995
Y2  - October 1995
UR  - http://www.nber.org/papers/w5313
L1  - http://www.nber.org/papers/w5313.pdf
N1  - Author contact info:
Nouriel Roubini
Department of Economics, KMC 7-83
Stern School of Business, New York University
44 West 4th Street
New York, NY  10012
Tel: 212/998-0886
Fax: 212/995-4218
E-Mail: nroubini@stern.nyu.edu
AB  - This paper presents an overview of recent theoretical and empirical research on 'liquidity models' in open economies; this is a class of optimizing models where money has effects on real asset prices and economic activity without relying on the 'ad-hoc' assumption of price/wage stickiness.  The non-neutrality of money derives from a temporary segmentation between goods and asset markets. After surveying the theoretical literature on liquidity models, we present empirical evidence based on VAR econometric techniques for the seven major industrial countries.  Such evidence is shown to be consistent with the main implications of the liquidity models.
ER  -