MONETARY EXPERIMENTS IN A NEOCLASSICAL MODEL |
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| Authors: | RUSSELL S. BOYER |
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| Affiliation: | University of Western Ontario and London School of Economics |
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| Abstract: | 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. |
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