Long Run Effects of Money on Real Consumption and Investment in the U.S
AbstractThis paper tests for long run effects of money on real expenditures in the U.S. over the 1959-2002 period. Real consumption and investment expenditures, as well as their broadly defined components, are examined. We also test for effects of money on long run reallocations of consumption expenditures among durables, nondurables, and services. The time series characteristics of each variable are rigorously investigated. This is followed by application of the long run neutrality test, introduced by Fisher and Seater (1993), to each real expenditures series. Results support long run neutrality of both M2 and M3 with respect to real expenditures for all examined levels of data aggregation.
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Bibliographic InfoPaper provided by EconWPA in its series Macroeconomics with number 0404007.
Length: 29 pages
Date of creation: 06 Apr 2004
Date of revision: 06 Apr 2004
Note: Type of Document - pdf; pages: 29
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money; neutrality; consumption; investment;
Other versions of this item:
- Shelley, Gary & Wallace, Frederick, 2006. "Long run effects of money on real consumption and investment in the U.S," MPRA Paper 4136, University Library of Munich, Germany.
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-04-11 (All new papers)
- NEP-MAC-2004-04-11 (Macroeconomics)
- NEP-MON-2004-04-11 (Monetary Economics)
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