Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314261 
Year of Publication: 
2024
Citation: 
[Journal:] Journal of Applied Economics [ISSN:] 1667-6726 [Volume:] 27 [Issue:] 1 [Article No.:] 2321422 [Year:] 2024 [Pages:] 1-28
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
The purpose of this paper is to estimate the relationship among a primary set of economic variables, including two types of monetary aggregates: simple sum M2 and credit-card-augmented Divisia inside money services. The importance of that comparison has grown as the use of credit cards in purchase transactions has expanded. The data period includes the Great Recession, which was heavily associated with finance and thereby especially relevant to this study. The basic methodology in this paper is VAR-Sign Restrictions estimation. VAR is a well-known method to analyze inter-dependency among economic variables. By applying VAR-Sign Restrictions, we analyze how economic variables behave, positively or negatively, toward differently defined shocks. Imposing signs on the direction of economic variable responses to shocks is based on economic prior beliefs, using Bayesian estimation. Our results provide deeper insights into the relative merits of the two types of monetary aggregates as indicators.
Subjects: 
Aggregation theory
Bayesian estimation
Credit-card-augmented divisia monetary aggregate
VAR-Sign Restriction
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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