Money and Inflation: Some Critical Issues

摘要: Abstract We consider what, if any, relationship there is between monetary aggregates and inflation, whether any substantial reason for modifying the current mainstream mode of policy analysis, which frequently does not at all. begin by considering body thought known as “quantity theory money.” The quantity centers on prediction that will be a long-run proportionate reaction price level to an exogenous increase in nominal money stock. homogeneity conditions deliver quantity-theory result are same those neutrality, important principle behind formulation. implies ceteris paribus unitary inflation growth. Simulations New Keynesian model suggest we should expect this apparent time series data, with no heavy averaging or filtering required, but allowance needed phase shift growth rates inflation. While financial innovation can obscure evidence growth/inflation emerge from United States G7 panel data. Various considerations studies behavior benefit including both interest empirical analysis.