A Comparison of Exchange Economies within a Monetary Business Cycle

21 Pages Posted: 14 Jul 2005

See all articles by Szilard Benk

Szilard Benk

European Central Bank (ECB)

Max Gillman

Central European University (CEU) - Department of Economics

Michal Kejak

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute)

Abstract

The paper sets out a monetary business cycle model with three alternative exchange technologies: the cash-only, shopping time and credit production models. The goods productivity and money shocks affect all three models, while the credit model has in addition a credit productivity shock. The paper compares the performance of the models in explaining the puzzles of the monetary business cycle theory. The credit model improves the ability to explain the procyclic movement of monetary aggregates, inflation and the nominal interest rate.

Suggested Citation

Benk, Szilard and Gillman, Max and Kejak, Michal, A Comparison of Exchange Economies within a Monetary Business Cycle. Manchester School, Vol. 73, No. 4, pp. 542-562, July 2005. Available at SSRN: https://ssrn.com/abstract=758576

Szilard Benk (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Max Gillman

Central European University (CEU) - Department of Economics ( email )

Nador u. 9.
Budapest H-1051
Hungary
+36 1 327 3227 (Phone)
+36 1 327 3232 (Fax)

Michal Kejak

Charles University in Prague - CERGE-EI (Center for Economic Research and Graduate Education - Economics Institute) ( email )

Politickych veznu 7
Prague 1, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

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