This paper proposes a Bayesian approach to explore money-output\ud causality within a logistic smooth transition VECM framework. Our\ud empirical results provide substantial evidence that the postwar US\ud money-output relationship is nonlinear, with regime changes mainly\ud governed by the lagged inflation rates. More importantly, we obtain\ud strong support for long-run non-causality and nonlinear Grangercausality\ud from money to output. Furthermore, our impulse response\ud analysis reveals that a shock to money appears to have negative accumulative\ud impact on real output over the next fifty years, which calls\ud for more caution when using money as a policy instrument
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