Nonneutrality of Money in Classical Monetary Thought
Article
Nonneutrality of Money in Classical Monetary Thought
Nonneutrality of Money in Classical Monetary Thought
Nonneutrality of Money in Classical Monetary Thought
Mar/Apr
1991
Nonneutrality of Money in Classical Monetary Thought
Thomas M. Humphrey phone= (Home) email=rich webcontent@rich.frb.org mapid=tmh1 /> {thohum1}
<p>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 money’s impact on real activity strongly influenced the classicals’ views of the desirability or undesirability of monetary expansion and contraction.</p>
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Monetary History
1
<p>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 money’s impact on real activity strongly influenced the classicals’ views of the desirability or undesirability of monetary expansion and contraction.</p>
Economic Review
Mar/Apr
1991