Komura, Chikara2009-12-072009-12-071986-06Komura, C., (1986), "Money and Income Causality in Japan Under the Flexible Exchange Rate Regime: 1971-1983", Discussion Paper No. 230, Center for Economic Research, Department of Economics, University of Minnesota.https://hdl.handle.net/11299/55500The paper examines Granger-causal relationships between money and income and its components in Japan under the flexible exchange rate regime. Through Sims's test and the Granger-Sargent test, M2CD and both GNP and real GNP appear to be in a bidirectional feedback relationship, while the GNP deflator is unidirectionally causal to M2CD. The findings conform to Mundell's theory and the liberalization of financial capital flows in December 1980. Analytical results are also confirmed with the impulse response based on the three-variate autoregressive model.en-USWorking Paper