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MONETARY EXPERIMENTS IN A NEOCLASSICAL MODEL
Author(s) -
BOYER RUSSELL S.
Publication year - 1976
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1976.tb00381.x
Subject(s) - economics , inflation (cosmology) , sign (mathematics) , price level , keynesian economics , monetary economics , interest rate , monetary policy , inflation rate , econometrics , physics , theoretical physics , mathematical analysis , mathematics
A Neoclassical Monetary Growth Model is formulated in which income is taken to be exogenous. A rise in the expected rate of inflation raises the price level but has an effect of indeterminate sign on the rate of interest. An increase in the quantity of money causes a more‐than‐proportional increase in the price level so that velocity rises. Therefore money is not neutral in the short run.