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Archive for April, 2011

13
Apr

Mankiw posts on the money multiplier

The money multiplier describes the relationship between monetary base and the money supply. One of the big questions is what has become of the money multiplier. Realize that it has been falling for a long time . . . but in the last few years it has behaved very peculiarly. See    http://www.nakedcapitalism.com/2010/03/guest-post-m1-money-multiplier-still-crashing-each-1-increase-in-monetary-base-results-in-only-79-cent-increase-in-money-supply.html

12
Apr

Paper by Agnello and Sousa

Agnello and Sousa have written a paper on the impact of fiscal policy on stock and housing markets. See

Can Fiscal Policy Stimulus Boost Economic Recovery?

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1803221

The authors argue the following: “Using a panel of ten industrialized countries, we show that a positive fiscal shock has a negative impact in both stock and housing prices. However, while stock prices immediately adjust to the shock and the effect of fiscal policy is temporary, housing prices gradually and persistently fall.”