TY  - JOUR
AU  - Belongia,Michael T.
AU  - Ireland,Peter N.
TI  - The Own-Price of Money and a New Channel of Monetary Transmission
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9341
PY  - 2002
Y2  - November 2002
UR  - http://www.nber.org/papers/w9341
L1  - http://www.nber.org/papers/w9341.pdf
N1  - Author contact info:
Peter N. Ireland
Boston College
Department of Economics
140 Commonwealth Ave.
Chestnut Hill, MA 02467-3859
Tel: 617/552-3687
Fax: 617/552-2308
E-Mail: irelandp@bc.edu
AB  - Traditionally, the effects of monetary policy actions on output are thought to be transmitted via monetary or credit channels. Real business cycle theory, by contrast, highlights the role of real price changes as a source of revisions in spending and production decisions.  Motivated by the desire to focus on the effects of price changes in the monetary transmission mechanism, this paper incorporates a direct measure of the real own-price of money into an estimated vector autoregression and a calibrated real business cycle model.  Consistent with this new view of the monetary transmission mechanism, both approaches reveal that movements in the own-price of money are strongly related to movements in output.
ER  -