THE DEMAND AND LIQUIDITY EFFECTS OF MONETARY SHOCKS

Authors
DOW JP
Citation
Jp. Dow, THE DEMAND AND LIQUIDITY EFFECTS OF MONETARY SHOCKS, Journal of monetary economics, 36(1), 1995, pp. 91-115
Citations number
17
Categorie Soggetti
Business Finance",Economics
Journal title
Journal of monetary economics → ACNP
ISSN journal
03043932
Volume
36
Issue
1
Year of publication
1995
Pages
91 - 115
Database
ISI
SICI code
0304-3932(1995)36:1<91:TDALEO>2.0.ZU;2-R
Abstract
This paper examines the effect of a monetary shock in a stochastic gro wth model with a cash-in-advance constraint and a financial intermedia ry. It explores the differences between the results of restrictions on nominal price adjustment (the demand effect) and restrictions on savi ngs behavior (the liquidity effect). It is found that the model that p roduces the appropriate response to a temporary monetary shock include s both demand and liquidity effects.