Lecture 2 Slides - Economics 210c/236a Fall 2011 Christina Romer David Romer LECTURE 2 The Effects of Monetary Changes Narrative Evidence and

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
L ECTURE 2 The Effects of Monetary Changes: Narrative Evidence and Natural Experiments September 7, 2011 Economics 210c/236a Christina Romer Fall 2011 David Romer
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
I. A NDERSEN AND J ORDAN , “M ONETARY AND F ISCAL A CTIONS : A T EST OF T HEIR R ELATIVE I MPORTANCE IN E CONOMIC S TABILIZATION
Background image of page 2
A simple model of the determination of some macro outcome where: - y is some macroeconomic variable of interest; - m is a measure of monetary developments; - e is other influences on y ; - N is the horizon over which m affects y.
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Potential Problems with the St. Louis Equation
Background image of page 4
Potential Problems with the St. Louis Equation 1. Endogenous policy causing correlation between e and the m’s. 2. Developments in the private economy causing correlation between e and the m’s.
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 General Comments about Omitted-Variable Bias 1. Think in terms of omitted-variable bias or correlation of right-hand side variables with the residual, not in terms of simultaneity or endogeneity. 2. It’s always good to think about what direction we expect bias in OLS to go.
Background image of page 6
II. F RIEDMAN AND S CHWARTZ , “A S UMMING U P
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 02/28/2012 for the course ECON 210c taught by Professor Romer,c during the Fall '08 term at University of California, Berkeley.

Page1 / 38

Lecture 2 Slides - Economics 210c/236a Fall 2011 Christina Romer David Romer LECTURE 2 The Effects of Monetary Changes Narrative Evidence and

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online