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Is Money Neutral in the Long Run?

Author

Listed:
  • Burton Abrams

    () (Department of Economics,University of Delaware)

  • Russell Settle

    (Department of Economics,University of Delaware)

Abstract

The traditional neoclassical open-economy flexible exchange rate model is expanded to include a “credit channel” by incorporating a bank loan market. The new “credit view” model provides substantially different predictions concerning the neutrality of money and the types of autonomous shocks that might affect the real exchange rate.

Suggested Citation

  • Burton Abrams & Russell Settle, 2005. "Is Money Neutral in the Long Run?," Working Papers 05-04, University of Delaware, Department of Economics.
  • Handle: RePEc:dlw:wpaper:05-04
    as

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    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2005/UDWP2005-04.pdf
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    References listed on IDEAS

    as
    1. Bernanke, Ben S & Blinder, Alan S, 1988. "Credit, Money, and Aggregate Demand," American Economic Review, American Economic Association, vol. 78(2), pages 435-439, May.
    2. Finn E. Kydland & Scott Freeman, 2000. "Monetary Aggregates and Output," American Economic Review, American Economic Association, vol. 90(5), pages 1125-1135, December.
    3. Bernanke, Ben S, 1983. "Nonmonetary Effects of the Financial Crisis in Propagation of the Great Depression," American Economic Review, American Economic Association, vol. 73(3), pages 257-276, June.
    4. Freeman, Scott & Huffman, Gregory W, 1991. "Inside Money, Output, and Causality," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 645-667, August.
    5. Albert E. Burger, 1969. "An analysis and development of the Brunner-Meltzer non-linear money supply hypothesis," Working Papers 1969-007, Federal Reserve Bank of St. Louis.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Credit Channel; Monetary policy; Fixed Exchange Rates; Money Neutrality;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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