Dissertation Information for Mina M. Dioun NAME: - Mina M. Dioun
- (Alias) Mina Mohammadioun
DEGREE:
- Ph.D.
DISCIPLINE:
- Economics
SCHOOL:
- University of Texas, Austin (USA) (1989)
ADVISORS: - None COMMITTEE MEMBERS: - None
MPACT Status: Incomplete - Not_Inspected
Title: Prediction of the velocity of money in the presence of financial innovation and deregulation: Application of time varying parameter models
Abstract: The Federal Reserve System is the main executive agency that formulates and implements monetary policy in the United States. In order to implement monetary policy, the Federal Reserve determines some intermediate targets or final targets, and by adopting an appropriate monetary policy, attempts to achieve certain objectives. These objectives include the desired level of economic growth, a low inflation rate, full employment, and a stable balance of payments.
The monetary aggregates (such as M1) are widely used by the Federal Reserve as intermediate targets. The primary justification for using a monetary aggregate as a target is that monetary aggregates can affect economic indicators such as gross national product (GNP). One of the main links between monetary aggregates and GNP is the velocity of money. In the pre-1973 era this relationship was stable and predictable. Since 1973, this relationship has been volatile. This translates to an unstable and unpredictable relation between GNP and M1. Of particular interest in this regard has been the question of what caused the unpredictable fluctuation in the velocity of M1.
The hypothesis of this dissertation is that the rapid diffusion of financial innovations, the deposit rate deregulation, and unexpected decline in the inflationary expectations are the main causes for the fluctuation in velocity of money since 1981. A time-varying parameter model for the velocity of money (simple sum M1 as well as Divisia M1) as a function of opportunity cost of holding money and inflation expectations is proposed. The proposed model is tested empirically. The empirical results support the theoretical hypothesis discussed above.
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MPACT Scores for Mina M. Dioun A = 0
C = 1
A+C = 1
T = 0
G = 0
W = 0
TD = 0
TA = 0
calculated 2008-01-31 06:25:51
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