Money's impact on economy strengthened after 1978, predicts future output.
The researchers developed a test to see if changes in one variable cause changes in another over time. They used a special model that allows for these changes to happen smoothly. When they applied the test to US data on money and output, they found that the influence of money on output got stronger after 1978. The model they used also did a good job of predicting output compared to a simpler model.
