SEASONALITY AND THE MONETIZATION OF FEDERAL BUDGET DEFICITS |
| |
Authors: | Douglas H. Joines |
| |
Abstract: | Prior findings that federal government budget deficits promptly lead to increases in the monetary base are unreliable. These findings are due largely to inadequate treatment of seasonality in post-war quarterly data. Once seasonality is properly modeled, no further short-run relation is apparent. Theory suggests that there may be a long-run relation between deficits and money growth. If such a relation exists, the sample of postwar U.S. data is too small to identify it. |
| |
Keywords: | |
|
|