Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR
ABSTRACTThe 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 pu...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2024-12-01
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| Series: | Journal of Applied Economics |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/15140326.2024.2321422 |
| _version_ | 1797295855196176384 |
|---|---|
| author | William A. Barnett Hyun Park |
| author_facet | William A. Barnett Hyun Park |
| author_sort | William A. Barnett |
| collection | DOAJ |
| description | ABSTRACTThe 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. |
| first_indexed | 2024-03-07T21:54:59Z |
| format | Article |
| id | doaj.art-221b6bdca0374b8f8ad80330077a2204 |
| institution | Directory Open Access Journal |
| issn | 1514-0326 1667-6726 |
| language | English |
| last_indexed | 2024-03-07T21:54:59Z |
| publishDate | 2024-12-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Journal of Applied Economics |
| spelling | doaj.art-221b6bdca0374b8f8ad80330077a22042024-02-24T14:22:12ZengTaylor & Francis GroupJournal of Applied Economics1514-03261667-67262024-12-0127110.1080/15140326.2024.2321422Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VARWilliam A. Barnett0Hyun Park1Department of Economics, University of Kansas, Lawrence, KS, USADepartment of Economics, Tulane University, New Orleans, LA, USAABSTRACTThe 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.https://www.tandfonline.com/doi/10.1080/15140326.2024.2321422Credit-card-augmented divisia monetary aggregateVAR-Sign RestrictionBayesian estimationAggregation theory |
| spellingShingle | William A. Barnett Hyun Park Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR Journal of Applied Economics Credit-card-augmented divisia monetary aggregate VAR-Sign Restriction Bayesian estimation Aggregation theory |
| title | Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR |
| title_full | Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR |
| title_fullStr | Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR |
| title_full_unstemmed | Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR |
| title_short | Have credit card services become important to monetary aggregation? An application of sign restricted Bayesian VAR |
| title_sort | have credit card services become important to monetary aggregation an application of sign restricted bayesian var |
| topic | Credit-card-augmented divisia monetary aggregate VAR-Sign Restriction Bayesian estimation Aggregation theory |
| url | https://www.tandfonline.com/doi/10.1080/15140326.2024.2321422 |
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