IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v75y1985i3p562-64.html
   My bibliography  Save this article

The Money Supply Announcements Puzzle: Comment

Author

Listed:
  • Falk, Barry
  • Orazem, Peter F

Abstract

In a recent paper in this Review (1983), Bradford Cornell presented a survey of existing literature on the empirical relationship between weekly money supply announcements made by the Federal Reserve and changes in the spot prices of several financial instruments at the time of the announcement. Cornell sought to unify and extend the work done in this area by estimating a number of relationships which bear directly on this issue. Among his main conclusions are that "asset markets are efficient with re­spect to money supply announcements" since "only the unexpected component of the announcement is correlated with price changes," and that the unexpected compo­ nent of money supply announcements has "a highly significant positive correlation" with short-term interest rates, but only after the October 6, 1979 change in Fed policy (p. 651). Both of these conclusions are at vari­ ance with results reported in similar studies by Jacob Grossman (1981), V. Vance Roley (1982), and Thomas Urich and Paul Wachtel (1981). All three find that unanticipated announcements matter in periods before October 6, 1979, and Roley and Urich-Wachtel find that anticipated announcements matter in at least some of their regressions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Falk, Barry & Orazem, Peter F, 1985. "The Money Supply Announcements Puzzle: Comment," American Economic Review, American Economic Association, vol. 75(3), pages 562-564, June.
    • Handle: RePEc:aea:aecrev:v:75:y:1985:i:3:p:562-64
    as

    Download full text from publisher

    File URL: http://links.jstor.org/sici?sici=0002-8282%28198506%2975%3A3%3C562%3ATMSAPC%3E2.0.CO%3B2-4&origin=repec
    File Function: full text
    Download Restriction: Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Timothy Q. Cook & Steve Korn, 1991. "The reaction of interest rates to the employment report: the role of policy anticipations," Economic Review, Federal Reserve Bank of Richmond, vol. 77(Sep), pages 3-12.
    2. V. Vance Roley, 1986. "U.S. Monetary Policy Regimes and U.S.-Japan Financial Relations," NBER Working Papers 1858, National Bureau of Economic Research, Inc.
    3. V. Vance Roley, 1986. "The Response of Interest Rates to Money Announcements under Alternative Operating Prosedures and Reserve Requirement Systems," NBER Working Papers 1812, National Bureau of Economic Research, Inc.
    4. Rik Hafer, 1985. "Further evidence on stock price response to changes in weekly money and the discount rate," Working Papers 1985-015, Federal Reserve Bank of St. Louis.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aecrev:v:75:y:1985:i:3:p:562-64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.