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Disaggregate Level Evidence on Monetary Neutrality

The Review of Economics and Statistics, 1988
Existing tests of the neutrality hypothesis focus on aggregate level economic activity. However, failure to examine disaggregate level effects can lead to incorrect inferences concerning anticipated and unanticipated money growth impacts. Disaggregate level testing of neutrality is limited.
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Expectations and Monetary Neutrality: An Empirical Reexamination

Southern Economic Journal, 1997
Modern monetary business cycle models feature rational expectations and natural rate assumptions which imply that unanticipated changes in nominal aggregates affect real output, but anticipated changes do not. Initial tests conducted by Barro [3] and by Barro and Rush [4] supported the neutrality of anticipated money growth.
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TESTS OF MONETARY NEUTRALITY ON FARM OUTPUT

1991
According to the monetary neutrality hypothesis, only the unanticipated money supply growth has impacts on real economic variables, and the anticipated money supply growth has no real impacts. The monetary neutrality hypothesis is tested on real farm output. The test procedure involves joint estimation of farm output and the money growth equation.
Devadoss, Stephen, Devadoss, Stephen
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MONETARY NEUTRALITY UNDER EVOLUTIONARY DOMINANCE OF BOUNDED RATIONALITY

Economic Inquiry, 2015
We provide evolutionary game‐theoretic microfoundations to a dynamic complete nominal adjustment in response to a monetary shock by introducing a novel analytical notion that we call boundedly rational inattentiveness. We investigate the behavior of the general price level in a context where a firm can either pay a cost (featuring a random component ...
Gilberto Tadeu Lima, Jaylson Jair da Silveira   +1 more
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Neutral Money and Monetary Policy

2007
A reliable monetary system is indispensable to an extended division of labour, which is the basis for economic advance. In facilitating exchange, money releases man from a close dependence upon nature and upon the narrow confines of local markets; but it forces an individual to rely upon the entrepreneurial success of other individuals: upon ‘human ...
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On Long-Run Monetary Neutrality in Japan [PDF]

Monetary and Economic Studies, 2004
This paper comprehensively investigates long-run monetary neutrality in Japan, with due consideration to the order of integration of the money stock and real output, mainly using long-term time-series data retroactively available from the Meiji Period (1868-1912).
Oi, Hiroyuki, Shiratsuka, Shigenori, Shirota, Toyoichiro   +2 more
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Monetary Neutrality with Sticky Prices and Free Entry

The Review of Economics and Statistics, 2021
Abstract Monetary policy is neutral even with fixed prices if free entry determines product variety optimally, as in Dixit and Stiglitz (1977). Entry substitutes for price flexibility in the welfare-based price index when individual prices are sticky.
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The ‘Natural’ Rate, Neutrality and Monetary Inflation

1989
Central to the neoclassical treatment of inflation is the concept of the ‘natural’ rate of unemployment, which proves to be another term for labour market equilibrium. The ‘naturalness’ of this rate derives from its characteristic of being consistent with a zero rate of change of the price level.
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Monetary neutrality in a dynamic macroeconomic model under alternative monetary regimes

Journal of Macroeconomics, 1992
Abstract This paper explores the neutrality of money under alternative stochastic monetary regimes in a simple growth model. The key result is that changes in monetary information lead to differing responses in prices and inflation. The key parameter is the transition between monetary states.
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The Implications of an Endogenous Money Supply for Monetary Neutrality [PDF]

, 1983
This paper examines the implications of an endogenous money supply for the perceived(by econometricians) and actual nonneutrality of money in rational expectations models of the class put forward by Lucas (1972, 1973) and Barro(1976, 1980) that stress incomplete information.
Robert G. King, Bharat Trehan
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