In the 1970s a common practice was to estimate a distributed lag modelrelating changes in nominal gross domestic product (Y) to current andpast changes in the money supply (X). Under what assumptions will thisregression estimate the causal effects of money on nominal GDP? Arethese assumptions likely to be satisfied in a modern economy like that ofthe United States?
In the 1970s a common practice was to estimate a distributed lag modelrelating changes in nominal gross domestic product (Y) to current andpast changes in the money supply (X). Under what assumptions will thisregression estimate the causal effects of money on nominal GDP? Arethese assumptions likely to be satisfied in a modern economy like that ofthe United States?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter24: The Aggregate Demand/aggregate Supply Model
Section: Chapter Questions
Problem 8SCQ: Suppose Mexico, one of our largest trading partners and purchaser of a large quantity of our...
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In the 1970s a common practice was to estimate a distributed lag model
relating changes in nominal gross domestic product (Y) to current and
past changes in the money supply (X). Under what assumptions will this
regression estimate the causal effects of money on nominal GDP? Are
these assumptions likely to be satisfied in a modern economy like that of
the United States?
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