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Long Run Neutrality and Superneutrality of Money: Aggregate and Sectoral Tests for Nicaragua

Listed author(s):
  • Frederick H. Wallace

    (Universidad de Quintana Roo)

  • Gary L. Shelley

    (East Tennessee State University)

The Fisher-Seater (1993) methodology is applied to Nicaraguan data to test for long run neutrality and superneutrality of money. Real GDP and real output in six broadly defined sectors are I(1), while the money supply is I(2). These orders of integration imply that money is neutral with respect to both aggregate and sectoral output. However, superneutrality is rejected for real GDP as well as for all six sectors. Results of the superneutrality tests suggest that inflation driven by money growth imposed real costs on the private sector while the government sector

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File URL: http://econwpa.repec.org/eps/mac/papers/0402/0402004.pdf
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Paper provided by EconWPA in its series Macroeconomics with number 0402004.

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Length: 27 pages
Date of creation: 02 Feb 2004
Handle: RePEc:wpa:wuwpma:0402004
Note: Type of Document - pdf; prepared on Windows2000; pages: 27
Contact details of provider: Web page: http://econwpa.repec.org

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