The variability of velocity of money in a search model |
| |
Authors: | Weimin Wang |
| |
Institution: | a Industry Canada, Canada b Department of Economics, University of Toronto, 150 St. George Street, Toronto, Ontario, Canada, M5S 3G7 |
| |
Abstract: | We construct a dynamic equilibrium model where there is costly search in the goods market and the labor market. Incorporating shocks to money growth and productivity, we calibrate the model to the US time series data to examine the model's quantitative predictions on aggregate variables and, in particular, on the variability of consumption velocity of money. Despite the fact that money is the only asset, the model captures most of the variability of velocity in the data. It also generates realistic predictions on the moments of other variables and provides persistent propagation of the shocks. The model generates these results largely because costly search gives an important role to the extensive margin of trade. |
| |
Keywords: | E40 E30 D83 |
本文献已被 ScienceDirect 等数据库收录! |
|