


Monetary Trends in the United States and the United Kingdom: Their Relations to Income, Prices, and Interest Rates
by Milton Friedman and Anna J. Schwartz
University of Chicago Press, 1982 Paper: 9780226264103  Cloth: 9780226264097  eISBN: 9780226264257 Library of Congress Classification HG501.F74 1982 Dewey Decimal Classification 332.4973
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ABOUT THIS BOOK
The special task of this book is to present a statistical and theoretical analysis of the relation between the quantity of money and other key economic magnitudes over periods longer than those dominated by cyclical fluctuationshence the term trends in the title. This book is not restricted to the United States but includes comparable data for the United Kingdom. TABLE OF CONTENTS
List of Charts
List of Tables Preface Principal Empirical Findings 1 Scope of the Study 2 The General Theoretical Framework 2.1 The Quantity Theory: Nominal versus Real Quantity of Money 2.2 Quantity Equations 2.2.1 Transactions Equation 2.2.2 The Income Form of the Quantity Equation 2.2.3 Cambridge CashBalances Approach 2.2.4 The Transmission Mechanism: Money to Income, Prices, Output 2.2.5 The International Transmission Mechanism 2.2.6 FirstRound Effects 2.3 Supply of Money in Nominal Units 2.4 The Demand for Money 2.4.1 Demand by Ultimate Wealth Holders 2.4.2 Demand by Business Enterprises 2.5 The Keynesian Challenge to the Quantity Theory 2.5.1 LongRun Equilibrium 2.5.2 ShortRun Price Rigidity 2.5.3 Absolute Liquidity Preference 2.6 The Adjustment Process 59 2.6.1 Division of a Change in Nominal Income between Prices and Output 2.6.2 ShortRun Adjustment of Nominal Income 2.6.3 Money Demand and Supply Functions 2.6.4 Determination of Interest Rates 2.6.5 Determination of Anticipated Values 2.7 An Illustration 2.7.1 LongRun Equilibrium 2.7.2 The Adjustment Process 2.8 Conclusion 3 The General Statistical Framework 3.1 The Reference Phase Base as the Unit of Observation 3.1.1 Phase Reference Dates 3.1.2 Computation of Phase Base 3.1.3 Weighting of Phase Bases in Statistical Computations 3.1.4 Possible Difficulties with Reference Phase Bases 3.2 Rates of Change Computed from Phase Bases 3.2.1 Weights for Rates of Change 3.2.2 Relation between Rates of Change Computed from Successive Triplets of Phase Averages and from Overlapping Cycle Bases 3.2.3 Possible Difficulties with Rates of Change Computed from Phase Bases 4 The Basic Data 4.1 United States Data 4.1.1 Money 4.1.2 Income 4.1.3 Prices 4.1.4 Interest Rates 4.1.5 Population 4.2 United Kingdom Data 4.2.1 Money 4.2.2 Income 4.2.3 Prices 4.2.4 Interest Rates 4.2.5 Population 4.2.6 Exclusion of Southern Ireland 4.3 Combined United States and United Kingdom Data 4.4 Appendix 5 Movements of Money, Income, and Prices 5.1 United States and United Kingdom Money Balances at the Beginning and End of a Century 5.1.1 Statistical Errors 5.1.2 Financial Sophistication 5.1.3 Real Income 5.1.4 Cost of Holding Money 5.2 Long Swings in the Levels of Money, Income, and Prices 5.3 Rates of Change of Money, Income, and Prices 5.4 Conclusion 5.5 Appendix 6 Velocity and the Demand for Money 6.1 Velocity: A Willo'theWisp? 6.2 Velocity: A Numerical Constant? 6.3 Effect of Financial Sophistication 6.4 Effect of Real per Capita Income 6.4.1 Levels 6.4.2 Rates of Change 6.5 Effect of Population and Prices 6.6 Effect of Costs of Holding Money 6.6.1 Yield on Nominal Assets 6.6.2 Interest on Deposits 6.6.3 Yield on Physical Assets 6.7 Effect of All Variables Combined 6.8 Appendix A 6.9 Appendix B 6.9.1 United States Term Structure Data 6.9.2 Estimating the Parameters of the Term Structure Yields 6.9.3 The Demand for Money, with the Term Structure of Interest Rates 7 Velocity and the Interrelations between the United States and the United Kingdom 7.1 The Reference Chronology 7.2 Correlation of United States and United Kingdom Velocities and Their Determinants 7.3 Role of Common Determinants of Velocity 7.4 Money and Income 7.4.1 Combined Money Stock 7.4.2 OwnCountry Money, OtherCountry Money, and OtherCountry Velocity 7.5 Conclusion 7.6 Appendix 8 Monetary Influences on Nominal Income 8.1 From the Demand for Balances to the Behavior of Nominal Income 8.2 Replacing Yields by Prior Income and Money 8.3 Replacing Prior Income by Prior Money 8.3.1 Income Elasticity 8.3.2 Transient Effects 8.3.3 The Effect of Nonunit Elasticity and Transient Effects on the Sum of the b's 8.3.4 Estimates of the Transient Effect 8.3.5 Summary 8.4 Appendix 8.4.1 Relation of Nominal Income to Real per Capita Income and Yields 8.4.2 Relation of Nominal Income to Current and Prior Money and Income 8.4.3 Relation of Nominal Income to Current and Prior Money Only 8.4.4 Allowing for Transient Effects 9 Division of Change in Income between Prices and Output 9.1 Alternative Simple Explanations 9.2 Price and Output Correlations 9.3 The Effect of Lengthening the Period 9.4 Framework for Further Analysis 9.5 Effect of Money and Yields 9.6 Effect of Current and Prior Money and Prior Income 9.7 Effect of Output Capacity and Anticipations: The Phillips Curve Approach 9.8 Effect of Output Capacity and Anticipations: The Approach through Alternative Models of the Formation of Anticipations 9.8.1 Alternative Hypotheses 9.8.2 Comparison of Alternative Hypotheses 9.9 Conclusion 9.10 Appendix 9.10.1 Relation of Prices and Output to Real per Capita Income and Yields 9.10.2 Relation of Prices and Output to Current and Prior Money and Income 9.10.3 Relation of Prices and Output to Current and Prior Money Only 9.10.4 Transient Effects 9.10.5 Alternative Hypotheses about Anticipations 10 Money and Interest Rates 10.1 The Theoretical Analysis 10.1.1 Monetary Disturbances 10.1.2 Real Disturbances 10.1.3 Conclusion 10.2 Average Yields 10.3 A Digression on the Measurement of Yields 10.4 Yields in Subperiods 10.4.I.United States versus United Kingdom 10.4.2 Yields on Nominal and Physical Assets 10.5 Relation between Yields on NOIninal and Physical Assets 10.6 Nominal Yields, Price Levels, and Rates of Change of Prices 10.7 Alternative Explanations of the Gibson Paradox 10.7.1 The Fisher Explanation 10.7.2 The WicksellKeynes Explanation 10.7.3 Other Real Explanations 10.7.4 Other Nominal Explanations 10.8 The Structural Change in the 1960s 10.9 Correlations with Money 10.9.1 Impact and Intermediate Effects 10.9.2 Price Effects 10.10 Conclusion 10.10.1 Yields on Nominal and Physical Assets 10.10.2 Interest Rates and Prices 11 Long Swings in Growth Rates 11.1 Past Work on Long Swings 11.2 Are the Swings Episodic or Cyclical? 11.3 The Role of Money in Long Swings 11.4 The Transmission Mechanism 11.5 Summary 12 The Role of Money 12.1 The Phillips Curve 12.2 Two Extreme Theories 12.3 The Demand for Money 12.4 Common Financial System 12.5 Dynamic Effects on Nominal Income 12.6 Dynamic Effects on Prices and Output 12.7 Interest Rates 12.8 Rational Expectations 12.9 Fisher and Gibson 12.10 Long Swings References Author Index Subject Index
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Monetary Trends in the United States and the United Kingdom: Their Relations to Income, Prices, and Interest Rates
University of Chicago Press, 1982 Paper: 9780226264103  Cloth: 9780226264097  eISBN: 9780226264257 Library of Congress Classification HG501.F74 1982 Dewey Decimal Classification 332.4973
ABOUT THIS BOOK  TOC  REQUEST ACCESSIBLE FILE
ABOUT THIS BOOK
The special task of this book is to present a statistical and theoretical analysis of the relation between the quantity of money and other key economic magnitudes over periods longer than those dominated by cyclical fluctuationshence the term trends in the title. This book is not restricted to the United States but includes comparable data for the United Kingdom. See other books on: Friedman, Milton  Income  Kingdom  Money & Monetary Policy  Schwartz, Anna J. See other titles from University of Chicago Press 
Nearby on shelf for Finance / Money / By region or country:
 