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An Evaluation of the Non-Neutrality of Money
This paper evaluates the effect of a change in the quantity of money on relative prices in the U.S. economy based on quarterly time-series for the period of 1959 to 2013. We also estimate the implication of a change in relative prices on the rate of inflation and macroeconomic variables. The empiric...
Autores principales: | , , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2016
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4775059/ https://www.ncbi.nlm.nih.gov/pubmed/26934716 http://dx.doi.org/10.1371/journal.pone.0145710 |
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author | Moreira, Tito Belchior Silva Tabak, Benjamin Miranda Mendonça, Mario Jorge Sachsida, Adolfo |
author_facet | Moreira, Tito Belchior Silva Tabak, Benjamin Miranda Mendonça, Mario Jorge Sachsida, Adolfo |
author_sort | Moreira, Tito Belchior Silva |
collection | PubMed |
description | This paper evaluates the effect of a change in the quantity of money on relative prices in the U.S. economy based on quarterly time-series for the period of 1959 to 2013. We also estimate the implication of a change in relative prices on the rate of inflation and macroeconomic variables. The empirical results indicate that the change of money supply not only affects relative prices but also affects the inflation rate and real variables, such as investment, natural rate of unemployment and potential GDP, through the change in relative prices. The relevant finding of our study is that money is not neutral in a non-traditional sense because a change in the money supply disturbs relative prices and, consequently, the allocation of resources in the economy. This finding has serious implications that must be considered in the transmission mechanisms of monetary policy. |
format | Online Article Text |
id | pubmed-4775059 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2016 |
publisher | Public Library of Science |
record_format | MEDLINE/PubMed |
spelling | pubmed-47750592016-03-10 An Evaluation of the Non-Neutrality of Money Moreira, Tito Belchior Silva Tabak, Benjamin Miranda Mendonça, Mario Jorge Sachsida, Adolfo PLoS One Research Article This paper evaluates the effect of a change in the quantity of money on relative prices in the U.S. economy based on quarterly time-series for the period of 1959 to 2013. We also estimate the implication of a change in relative prices on the rate of inflation and macroeconomic variables. The empirical results indicate that the change of money supply not only affects relative prices but also affects the inflation rate and real variables, such as investment, natural rate of unemployment and potential GDP, through the change in relative prices. The relevant finding of our study is that money is not neutral in a non-traditional sense because a change in the money supply disturbs relative prices and, consequently, the allocation of resources in the economy. This finding has serious implications that must be considered in the transmission mechanisms of monetary policy. Public Library of Science 2016-03-02 /pmc/articles/PMC4775059/ /pubmed/26934716 http://dx.doi.org/10.1371/journal.pone.0145710 Text en © 2016 Moreira et al http://creativecommons.org/licenses/by/4.0/ This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. |
spellingShingle | Research Article Moreira, Tito Belchior Silva Tabak, Benjamin Miranda Mendonça, Mario Jorge Sachsida, Adolfo An Evaluation of the Non-Neutrality of Money |
title | An Evaluation of the Non-Neutrality of Money |
title_full | An Evaluation of the Non-Neutrality of Money |
title_fullStr | An Evaluation of the Non-Neutrality of Money |
title_full_unstemmed | An Evaluation of the Non-Neutrality of Money |
title_short | An Evaluation of the Non-Neutrality of Money |
title_sort | evaluation of the non-neutrality of money |
topic | Research Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4775059/ https://www.ncbi.nlm.nih.gov/pubmed/26934716 http://dx.doi.org/10.1371/journal.pone.0145710 |
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