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Nonneutrality of money in classical monetary thought

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  • Thomas M. Humphrey

Abstract

Contrary to the strawman classical model of the textbooks, the original classical economists did not believe that money-stock changes affect only the price level and not real output and employment. Most classicals saw money as having powerful short-run real effects and perhaps some residual long-run effects as well. Concern for moneys impact on real activity strongly influenced the classicals views of the desirability or undesirability of monetary expansion and contraction.

Suggested Citation

  • Thomas M. Humphrey, 1991. "Nonneutrality of money in classical monetary thought," Economic Review, Federal Reserve Bank of Richmond, vol. 77(Mar), pages 3-15.
    • Handle: RePEc:fip:fedrer:y:1991:i:mar:p:3-15:n:v.77no.2
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    References listed on IDEAS

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    6. Glasner,David, 2005. "Free Banking and Monetary Reform," Cambridge Books, Cambridge University Press, number 9780521022514, June.
    7. F. A von Hayek, 1932. "A Note on the Development of the Doctrine of "Forced Saving"," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 47(1), pages 123-133.
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    Cited by:

    1. Gilles Jacoud, 1994. "Stabilité monétaire et régulation étatique dans l'analyse de Léon Walras," Revue Économique, Programme National Persée, vol. 45(2), pages 257-288.
    2. Richard K. Crump & Stefano Eusepi & Marc Giannoni & Aysegul Sahin, 2019. "A Unified Approach to Measuring u," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 50(1 (Spring), pages 143-238.
    3. Moosa, Imad A., 1997. "Testing the long-run neutrality of money in a developing economy: the case of India," Journal of Development Economics, Elsevier, vol. 53(1), pages 139-155, June.
    4. Jeffrey M. Lacker & John A. Weinberg, 2007. "Inflation and unemployment: a layperson's guide to the Phillips curve," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 93(Sum), pages 201-227.

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