On the asymmetric effects of money-supply shocks: international evidence from a panel of OECD countries
Authors: Karras, Georgios; Stokes, Houston H.
Source: Applied Economics, Volume 31, Number 2, 1 February 1999 , pp. 227-235(9)
Abstract:We examine whether the asymmetric effect of money on output is an international phenomenon, and investigate the reasons for this asymmetry. Quarterly data from the 1963-93 period for a panel of twelve OECD countries strongly support asymmetry internationally: negative money-supply shocks are shown to have a stronger effect on output than positive shocks. Our methodology also enables us to distinguish between two sets of theories consistent with the output asymmetries: a convex aggregate supply and a credit view. We find that the effects of money on prices are generally symmetric, which may be consistent with both sets of theories being operative at once.
Document Type: Research Article
Publication date: February 1, 1999