TY  - JOUR
AU  - Ireland,Peter N.
TI  - Endogenous Money or Sticky Prices?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9390
PY  - 2002
Y2  - December 2002
UR  - http://www.nber.org/papers/w9390
L1  - http://www.nber.org/papers/w9390.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  - What explains the correlations between nominal and real variables in the postwar US data? Are these correlations indicative of significant nominal price rigidity? Or do they simply reflect the particular way that monetary policymakers react to developments in the real economy? To answer these questions, this paper uses maximum likelihood to estimate a model of endogenous money. This model allows, but does not require, nominal prices to be sticky. The results show that nominal price rigidity, over and above endogenous money, plays a role in accounting for key features of the data.
ER  -