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MONETARY NEUTRALITY

Published online by Cambridge University Press:  19 September 2017

Apostolos Serletis  and
Zisimos Koustas
Apostolos Serletis*
Affiliation:
University of Calgary
Zisimos Koustas
Affiliation:
Brock University
*
Address correspondence to: Apostolos Serletis, Department of Economics, University of Calgary, Calgary, Alberta T2N 1N4, Canada; e-mail: [email protected].
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Abstract

We test the long-run neutrality of money proposition for the United States paying attention to the integration and cointegration properties of the variables. We use quarterly data (over the period from 1967:1 to 2014:1) and the new Center for Financial Stability Divisia monetary aggregates. We make a comparison among the narrower monetary aggregates, M1, M2M, MZM, M2, and ALL, and the broad monetary aggregates, M4+, M4-, and M3, and show that there is no statistically significant evidence against long-run monetary neutrality, consistent with both monetarist and Keynesian macroeconomic theory.

Keywords

Monetary PolicyMoney ShocksDivisia Monetary Aggregates
Type
Articles
Information
Macroeconomic Dynamics , Volume 23 , Issue 6 , September 2019 , pp. 2133 - 2149
Copyright
Copyright © Cambridge University Press 2017 

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