THE INCOME EFFECTS OF THE SOURCES OF MONETARY CHANGE: AN HISTORICAL APPROACH*

This paper attempts to answer the question – does the way in which the quantity of money is introduced into the economic system matter or only the amount introduced? The question of the importance of the sources of monetary change has become a key issue between Monetarists and Neo-Keynesians. The approach of the paper is to compare different periods in U. S. monetary history over the time span 1834–1914, which exhibited different sources of monetary change, to see whether the source of monetary change significantly affected the relationship between money and income between these periods, as well as within them. In the majority of cases examined, the income effects of the sources of monetary change were found to be insignificant.