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WORKING PAPER SERIES
Estimates of the Link Between Variable Money Growth and GNP: A Supplement
to Mascaro and Meltzer
Michael T. Belongia
Working Paper 1984-008A http://research.stlouisfed.org/wp/1984/1984-008.pdf
1984
FEDERAL RESERVE BANK OF ST. LOUIS Research Division 411 Locust Street
St. Louis, MO 63102 ______________________________________________________________________________________
The views expressed are those of the individual authors and do not necessarily reflect official positions of the Federal Reserve Bank of St. Louis, the Federal Reserve System, or the Board of Governors.
Federal Reserve Bank of St. Louis Working Papers are preliminary materials circulated to stimulate discussion and critical comment. References in publications to Federal Reserve Bank of St. Louis Working Papers (other than an acknowledgment that the writer has had access to unpublished material) should be cleared with the author or authors.
Photo courtesy of The Gateway Arch, St. Louis, MO. www.gatewayarch.com
E s t i ~ a t e s of t h e Link Retween Varfa5le Money Growth 3nd GNP: A 4uppPement
t o Mascaro 2nd Meltzer
Mich3el T. Belongi I
Feders l Reserve 3ank of S t . Louis 84-00 8
Tne views axpressed he re a r e tilose of t h e a u t h o r s " a d do no t r e f l e c t those of t h e Federa l Reserve Rank of S t . Louis o r t h e Board of Governors of t h e Federa l Reserve 4ystem. Not t o be quoted v-Ltt.lout au tho r s ' perrnlssion.
ABSTRACT
Yascaro and Mebtzer hsve i a p l i e d , b u t n o t t e s t e d , t l ~ s t increased unce r t a in ty shout monetary pol icy w i l l reduce real. income. nis propos i t i on i s t e s t e d 3 i r e c t l v 5 y adding 3. {Calman f i l t e r e s t ima te of monetary unce r t a in ty t o 3 S t . Louis-type GNP equat ion. me r e s u l t s i n d i c a t e t h 2 t -i lcreased unce r t a in ty .,:,out monetary pol tcy has perw3nent negat ive e f f e c t s on both the l e v e l and growth r a t e of GNP.