Interest Rate Smoothing and Price Level Trend-Stationarity
Federal Reserve Bank of Richmond Working Paper No. 86-4
19 Pages Posted: 24 Oct 2012
Date Written: July 1, 1986
For industrial countries in the post-war period, the price level and the money stock have displayed little tendency to revert to given growth paths. Indeed, this stylized fact is frequently referred to by monetarist critics of central banks, who point out that periods of temporarily high or low money growth, rather than being subsequently reversed, typically alter the level of money stock and prices permanently.
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