Skip to main content

May/June 1996, 
Vol. 78, No. 3
Posted 1996-05-01

Inflation, Growth, and Financial Intermediation

by V.V. Chari, Larry E. Jones, and Rodolfo E. Manuelli

The authors summarize the recent empirical work on the growth effects of monetary policy instruments and compare the empirical findings with the implications of quantitative models in which monetary policy can affect growth rates. They ask, in particular, What is the relationship in the data between monetary policy instruments and the rate of growth of output? Are the predicted quantitative relationships from theoretical models consistent with the data?