Abstract
This paper examines whether the asymmetric effect of money on output is an international phenomenon and investigates the reasons for this asymmetry. Annual data from the 1950–1990 period for a panel of 38 countries strongly support asymmetry internationally: negative money-supply shocks are shown to have a stronger effect on output than positive shocks (whose effect is often statistically insignificant). Next, the paper distinguishes between two types of theories that are consistent with the observed output effects: the convex aggregate supply and the “pushing on a string” views, that predict that money shocks have different asymmetric effects on prices. Somewhat surprisingly, however, the effects of money on prices are shown to be symmetric. This finding is consistent with both theories being operative.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
