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Money growth and inflation: how long is the long run?

Author

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  • Terry J. Fitzgerald

Abstract

In their efforts to maintain low inflation, policymakers pay little attention to the growth rate of the money supply. Yet many studies have found that money growth and inflation a closely related, at least in the long run. But how long must money growth remain strong before it begins to concern policymakers? That is, what is the shortest period over which money growth seems to be reliably associated with inflation?

Suggested Citation

  • Terry J. Fitzgerald, 1999. "Money growth and inflation: how long is the long run?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Aug.
    • Handle: RePEc:fip:fedcec:y:1999:i:aug1
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    Citations

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    Cited by:

    1. Wang, Pengfei & Wen, Yi, 2007. "Inflation dynamics: A cross-country investigation," Journal of Monetary Economics, Elsevier, vol. 54(7), pages 2004-2031, October.
    2. Katrin Assenmacher-Wesche & Stefan Gerlach, 2007. "Money at Low Frequencies," Journal of the European Economic Association, MIT Press, vol. 5(2-3), pages 534-542, 04-05.
    3. Scott Benolkin & George A. Kahn, 2007. "The role of money in monetary policy: why do the Fed and ECB see it so differently?," Economic Review, Federal Reserve Bank of Kansas City, vol. 92(Q III), pages 5-36.
    4. Alfred A. Haug & William G. Dewald, 2012. "Money, Output, And Inflation In The Longer Term: Major Industrial Countries, 1880–2001," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 773-787, July.
    5. Albert Marcet & Juan Pablo Nicolini, 2005. "Money and Prices in Models of Bounded Rationality in High Inflation Economies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 8(2), pages 452-479, April.
    6. Harold J. Brumm, 2005. "Money Growth, Output Growth, and Inflation: A Reexamination of the Modern Quantity Theory's Linchpin Prediction," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 661-667, January.
    7. Levent, Korap, 2008. "Long-run relations between money, prices and output: the case of Turkey," MPRA Paper 20265, University Library of Munich, Germany.
    8. Paul De Grauwe & Magdalena Polan, 2005. "Is Inflation Always and Everywhere a Monetary Phenomenon?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 107(2), pages 239-259, June.
    9. Paul De Grauwe & Magdalena Polan, 2014. "Is Inflation always and Everywhere a Monetary Phenomenon?," World Scientific Book Chapters, in: Exchange Rates and Global Financial Policies, chapter 14, pages 357-382, World Scientific Publishing Co. Pte. Ltd..
    10. Donni Fajar Anugrah & Rakhmat Pratama, 2018. "Core Inflation Determinants: Decomposition Of Global And Domestic Factors Associated With Sectoral Inflation," Working Papers WP/31/2018, Bank Indonesia.
    11. Zeno Adams & Kristian Blickle, 2018. "Immigration And The Displacement of Incumbent Households," Working Papers on Finance 1809, University of St. Gallen, School of Finance.
    12. Barbara Roffia & Andrea Zaghini, 2007. "Excess Money Growth and Inflation Dynamics," International Finance, Wiley Blackwell, vol. 10(3), pages 241-280, December.

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