A Textbook Macro Model with Money

16 Pages Posted: 7 Dec 2005

See all articles by Franz Seitz

Franz Seitz

Technical University of Applied Sciences Weiden

Gerhard Roesl

Deutsche Bundesbank - Economics Department

Karl-Heinz Toedter

Deutsche Bundesbank - Economics Department

Date Written: December 2005

Abstract

In the traditional macroeconomic IS-LM-AS model the money stock is an exogenous instrumental variable of the central bank. This model type is being increasingly superseded by New Keynesian (NK) models. However, it is widely ignored that NK theorists essentially put forward a model for analysing monetary policy in which monetary aggregates ceased to play any role. This paper introduces a monetary macro model (MMM) in which the money market is fully represented and in which inflation is a monetary phenomenon.

Keywords: money, P-Star, New-Keynesian model, inflation

JEL Classification: A22, E41, E52

Suggested Citation

Seitz, Franz and Roesl, Gerhard and Toedter, Karl-Heinz, A Textbook Macro Model with Money (December 2005). Available at SSRN: https://ssrn.com/abstract=868581 or http://dx.doi.org/10.2139/ssrn.868581

Franz Seitz (Contact Author)

Technical University of Applied Sciences Weiden ( email )

Hetzenrichter Weg 15
D-92637 Weiden i.d. Opf
Germany
(49) 961-382-1318 (Fax)

Gerhard Roesl

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

Karl-Heinz Toedter

Deutsche Bundesbank - Economics Department ( email )

Wilhelm-Epstein-Strasse 14
60431 Frankfurt am Main
Germany

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