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Monetary Regime Change And Undisclosed Money Supply Shocks

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Found this little gem today, puplished by the central reserve bank of Kansas city (ironic...):

http://www.kc.frb.org/Publicat/Reswkpap/PDF/RWP06-05.pdf

Very heavy reading, but basically the paper concludes that supply-side shocks are not an exclusive cause of stagflation in the US economy. They talk about "less than transparent" dealings by central banks causing increases in money supplies as a primary cause.

Alternatively, consider the baseline case in which B=0.025, so that on average the monetary regime changes once every ten years. The central bank does not make its policies (in the form of money growth shocks) explicitly known, which requires that firms learn about the nature of the shocks they face through a signal extraction problem. This combination of factors generates stagflation regularly: 76% of the simulations experience at least one stagflationary episode.

What no M3 data? AND supply side shocks??

No wonder...

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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