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Topic: Neutrality of money

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	Neutrality of money - Wikipedia, the free encyclopedia
		Money neutrality implies that the central bank cannot affect the real economy (eg, the number of jobs, the size of GDP, the amount of investment) by printing money.
		Many economists argue that money neutrality is a good approximation for how the economy behaves over long periods of time, but in the short run, consider it likely that money might affect output.
		Superneutrality of money is the inability of changes in the growth rate of the money stock in an economy to affect any variable except the inflation rate.
	en.wikipedia.org /wiki/Neutrality_of_money (370 words)

	Money, Method, and the Market Process Ch 5
		The erroneous assumption of money neutrality is at the root of all endeavors to establish the formula of a so-called equation of exchange.
		Money, of course, is a dynamic factor and as such cannot be discussed in terms of static equilibrium.
		I have demonstrated that money acts as a dynamic agent and that the assumption that the changes in purchasing power are inversely proportional to the changes in the relation of demand for to the supply of money is fallacious.
	www.mises.org /mmmp/mmmp5.asp (3892 words)

	Mises on Money, Part III (Site not responding. Last check: 2007-11-06)
		Neutral money is money that is generated by a monetary system in which there are no involuntary wealth-redistribution effects inflicted on third parties when there are changes in the supply of money.
		The price-competition associated with an increase in the division of labor was offset in the index by the increase of bank-credit money.
		The characteristic feature of the development of the demand for money is its intensification; the growth of division of labor and consequently of exchange transactions, which have constantly become more and more indirect and dependent on the use of money, have helped to bring this about, as well as the increase of population and prosperity.
	www.lewrockwell.com /north/north85.html (4030 words)

	Golden Bar Home
		The simple statement, that money is a commodity whose economic function is to facilitate the interchange of goods and services does not satisfy those writers who are interested rather in the accumulation of material than in the increase of knowledge.
		The neutrality of money is a concept that has become widely recognized, assumed, and accepted, but never properly defended or rationalized.
		Money is the medium of exchange the seller of goods most readily accepts for his or her labor.
	www.goldenbar.com /Briefs/06Nov02Editorial.htm (2230 words)

	3.Money
		While some economists also recognise the influence of money on some nominal measures, notably the rate of inflation, the importance of this is seen in the context by which variations in inflation (caused by variations in the rate of growth of the money supply) destabilise the economy and knock it from its equilibrium growth path.
		Friedmans restatement was that money demand was a function of the current price level, the rates of return on bonds and equities, the rate of inflation and the stock of wealth (calculated from permanent income).Thus, money demand (and also velocity) is a stable function of these variables.
		The instability of money demand and the unpredictability of the velocity of money in the early 1980s, and the abandonment of the monetarist experiment in the UK and US in the 1980s were the basis of the criticisms of monetarism.
	www.maths.tcd.ie /pub/econrev/ser/html/does.html (3938 words)

	FRB: Speech, Meyer -- Does money matter? -- March 28, 2001
		Money could play a role in structural equations for aggregate demand, or in VARs, as a proxy for channels that may be difficult to quantify or were simply left out.
		The recent jump in money growth is evident in chart 3 where I have plotted the three-month and two-year growth rates for M2 along with the reference value.
		Third, money growth is an imperfect information variable, and as a result, deviations of money growth from its reference value have to be carefully evaluated before a judgment is made that policy is inconsistent with the medium-term inflation objective.
	www.federalreserve.gov /boarddocs/speeches/2001/20010328/default.htm (10462 words)

	The Problem of Money
		"Money is not, properly speaking, one of the subjects of commerce, but only the instrument which men have agreed upon to facilitate exchange of one commodity for another.
		Although many people (and many economists) have confused the terms "neutrality" and "dichotomy", there is a difference: neutrality only claims money is a "veil" in the long-run, whereas dichotomy asserts that money is a "veil" both in the long-run and the short-run.
		This issue, lurching between seeing money being only a "veil" and then going on to claim it is nonetheless "desirable" has led to many twists and turns in the history of theories of money.
	cepa.newschool.edu /het/essays/money/problem.htm (1242 words)

	Monetary Central Planning and the State, Part 6: Ludwig von Mises and the Non-Neutrality of Money
		If increases or decreases in the quantity of money brought about simultaneous and proportional increases and decreases in all prices, changes in the supply of money would be neutral in their effects on the economy.
		Economists such as Irving Fisher reasoned that the non-neutrality of money was due only to the fact that changes in the money supply were less than fully anticipated, and as a result, resource and labor contracts did not completely incorporate the actual average rate of price changes into resource prices and wage negotiations.
		If there is an increase in the supply of money, it must necessarily take the form of an increase in the cash holdings of particular people, who are the starting point of the resulting social consequences of a change in the quantity of money.
	www.fff.org /freedom/0697b.asp (1735 words)

	Scottish Approaches to Money
		Naturally, Hume's ideas have older roots: the direct "quantity theory" relationship between money and prices as we noted, was introduced by Jean Bodin and the theory itself was due to John Locke.
		Thus, David Hume's adamant stress upon the idea of money as a "veil" must be regarded in the light of his attempt to assail Mercantilism in general.
		Secondly, as noted, Smith was also the developer of the "Real Bills" doctrine of money, which makes his theory rather distinct from both Hume and the Classical economists and closer to the older pre-classical theories of Davanzati, John Law and Sir James Steuart.
	cepa.newschool.edu /het/essays/money/scotmoney.htm (506 words)

	Keynes on the "Nature of Economic Thinking": The Principle of Non-Neutrality of Choice and the Principle of ...
		That body of beliefs is grounded on (1) the principle of non-neutrality of choice and (2) the principle of non-neutrality of money.
		Both principles were essential parts of the core of Keynes's A Treatise on Money (1930) and The General Theory (1936), and should be used as foundation for future development of Keynesian economics at the methodological as well as at the theoretical level.
		Both principles were essential parts of the core of Keynes's A Treatise on Money (1930) and The General Theory of Employment, Interest and Money (1936), and should be used as foundation for future development of Keynesian economics at the methodological as well as at the theoretical level.
	www.findarticles.com /p/articles/mi_m0254/is_4_60/ai_80802014 (1081 words)

	HES: Re: QUERY -- The neutrality of money
		That is, the quantity theory of money is not about money at all: it is about price, in which price is quoted in an arbitrary numeraire unit called money.
		Friedmans mechanistic splitting of the effect of a change in money stock M on prices P and output T is not helpful; it does not give any clue to what causal factors determine the effect on price versus the effect on output.
		If real goods are paid for with money, then the structure and the level of output must be affected by the quantity of money as well as by its point of injection and more generally by its path of circulation.
	eh.net /pipermail/hes/2005-March/002916.html (659 words)

	Neutral - Wikipedia, the free encyclopedia
		Neutral level, in semiotics, is the physical or material creation of esthesic and poietic processes
		Neutrality of money, in economics, the question of whether money supply affects the real economy
		Neutral point of view, a stance or tone that is free from bias
	en.wikipedia.org /wiki/Neutrality (187 words)

	ACM Ubiquity - The Net Neutrality Debate
		Net neutrality is the term generally applied to the concept that ISPs should in no way privilege specific types of content (or, for that matter, disadvantage other types of content).
		One of the most reasoned commentaries is by Daniel Berninger: "Net neutrality means don't tread on the Internet!" His essay was published on April 18, 2006 on the Jeff Pulver blog http://pulverblog.pulver.com/.
		ISPs who take money from content providers to increase accessibility to their content or to block access to competitors may forfeit their defensive claims to being content-neutral distributors immune to liability for libel and other legal infringements (I have not discussed other issues such as intellectual property violations).
	www.acm.org /ubiquity/views/v7i20_neutrality.html (1857 words)

	Current Issues (via CobWeb/3.1 planetlab2.cs.virginia.edu) (Site not responding. Last check: 2007-11-06)
		Long run super- neutrality is the proposition that affirms that permanent exogenous changes to the rate of growth of the money supply will cause equal changes in nominal variables and will have no impact on the level of real variables.
		Their methodology does not assume money exogeneity, and proposes that, for example, the impact of money on output, or output on money, be tested under alternative identifying restrictions.
		Patinkin, Don (1987) Neutrality of money, in John Eatwell, Murray Milgate, and Peter Newman (Eds.), The newpalgrave: a dictionary of economics, Vol.
	www.journalofpolicymodels.com.cob-web.org:8888 /jose.shtml (1860 words)

	Sound Money and the Business Cycle
		This early development of Austrian business cycle theory was a direct manifestation of Mises's rejection of the concept of neutral money and "emerged as an almost incidental by-product of his exploration of the theory of banking " (Kirzner 2001, p.
		Sound money is then a money whose purchasing power and quantity is determined by consumers'/producers' valuations as determined by their preferences, knowledge, and resources—a market determined commodity money absent government intervention.
		Sound money provides a financial environment where economic crisis associated with misdirections of resources and malinvestments can be avoided and where monetary calculation can be as efficient as possible.
	www.gold-eagle.com /gold_digest_03/cochran032503.html (3100 words)

	Money and Inflation (Site not responding. Last check: 2007-11-06)
		If they can't issue debt and they can't reduce the deficit, the only alternative left is to print money: in short, they pay their bills with money, which is easy enough to print.
		In the case of the inflation tax, the tax base are the real money balances while the tax rate at which they are taxed is the inflation rate.
		While the near proximate cause of high inflation is always monetary as inflation is associated with high rates of growth of money, the true structual cause of persistent high inflation is a fiscal deficit that is not eliminated with cuts in spending and/or increases in (non-seigniorage) taxes.
	pages.stern.nyu.edu /~nroubini/NOTES/HAND6.HTM (1601 words)

	WebProWorld :: View topic - Follow The Net Neutrality Money Trail
		Verizon has publicly vowed to uphold Net Neutrality principles in tact as it continues to lobby against legislation (and to ensure that agreed-to principles required as conditions set by the FCC during its merger with MCI would sunset after 30 months).
		Beyond that, the measures to keep Net Neutrality off of lawmakers agendas is a temporary profit grab until a truer monopoly can be formed 15 or 20 years down the road.
		Net neutrality is an idea that was hijacked by the internet giants that provide content, not the telcos and not the cable companies that build and maintain the networks that make up the internet.
	www.webproworld.com /viewtopic.php?t=64337 (5480 words)

	Concurring Opinions: Net Neutrality: Law, Money, and Culture
		That's what convinced me that the stakes are ultimately a "battle for mindshare" (to use Hannibal Travis's evocative metaphor), and can't be cast in simple economic terms.
		[N]et neutrality advocates generally abhor the idea of Internet “fast lanes” in which content providers could ensure priority delivery of their content if they were willing to pay for it.
		We find it ironic that the net neutrality advocates are willing to say that price discrimination on the basis of general speed and convenience of the Internet connection is acceptable; but discrimination that would guarantee a site will be available at a certain speed and time is not.
	www.concurringopinions.com /archives/2006/10/net_neutrality.html (895 words)

	HES: Re: QUERY -- The neutrality of money (Site not responding. Last check: 2007-11-06)
		Throughout the 50s and 60s, in the heyday of optimism about the potential effectiveness of discretionary monetary policy, the theory associated with what Mark Blaug called the Cantillon effect was available to typical economics students only in the history of thought texts (e.g., Economic Theory in Retrospect).
		Economists who were critical of this optimism, like Friedman and Buchanan, focused not on the disruptive injection effects of an increase or decrease in the quantity of money but on the political processes that pressure the actual monetary policy decisions.
		Also to elaborate on Larry's point about the particular means of increasing the quantity of money (namely, through the loan market), the key to understanding the Austrian argument is to recognize the demand for present goods in relation to the demand for future goods.
	www.eh.net /pipermail/hes/2005-March/002914.html (321 words)

	SSRN-The Distribution of Money Balances and the Non-Neutrality of Money by Aleksander Berentsen, Gabriele Camera, ...
		We generalize these models by assuming two rounds of trade before agents can readjust their money holdings to study a range of new distributional effects analytically.
		We show that unexpected, symmetric lump-sum money injections may increase short-run output and welfare, while asymmetric injections may increase long-run output and welfare.
		Berentsen, Aleksander, Camera, Gabriele and Waller, Christopher J., "The Distribution of Money Balances and the Non-Neutrality of Money" (January 2005).
	papers.ssrn.com /sol3/papers.cfm?abstract_id=647361 (297 words)

	Testing for Long Run Neutrality of Money in Mexico (Site not responding. Last check: 2007-11-06)
		The Fisher-Seater methodology is used to investigate long run money neutrality in Mexico from 1932-2001.
		Neutrality is not rejected if post-1981 real GDP is adjusted for the change in mean growth or if one uses data only through 1981.
		This finding of non- neutrality in Mexico arising from extreme conditions is similar to that of Boschen and Otrok (1994) for the US.
	ideas.repec.org /p/wpa/wuwpma/0402003.html (828 words)

	Growth and the Neutrality of Money (Site not responding. Last check: 2007-11-06)
		Using two simple stochastic growth models that nest both exogenous and endogenous growth, this paper shows that money should not be neutral in the long run if it is not neutral in the short run and if growth is endogenous.
		By contrast, if growth is exogenous, money should be neutral in the long run.
		The paper also tests whether money is neutral in the long run, finding no contrary evidence.
	ideas.repec.org /p/fth/osakae/398.html (316 words)

	International Evidence on the Neutrality of Money
		We use Backus and Kehoe (1992) long, low frequency data on real GNP/GDP and money for Australia, Canada, Denmark, Germany, Italy, Japan, Norway, Sweden, the United Kingdom and the Uniter States to examine the long-run neutrality and superneutrality of money propositions.
		"International Evidence on the Neutrality of Money," Journal of Money, Credit and Banking, Ohio State University Press, vol.
		"Long-Run Neutrality in a Long-Memory Model," Macroeconomics 9809006, EconWPA, revised 30 Sep 1998.
	ideas.repec.org /p/fth/calgar/9704.html (398 words)

	CEPR Discussion Paper Abstracts (Site not responding. Last check: 2007-11-06)
		Despite their importance, little firm international evidence on the validity of these neutrality hypotheses is available to date.
		This paper applies a bivariate VAR approach to test the long-run restrictions implied by a number of neoclassical neutrality propositions.
		The evidence from the G7 countries appears to be consistent with the long-run neutrality of money and the vertical Phillips curve, but the data largely refute the long-run super-neutrality of money and the `Fisher effect' of inflation on interest rates.
	www.cepr.org /Pubs/new-dps/dplist.asp?dpno=1042 (239 words)

	Safe Haven \| The Neutrality Of Money (Site not responding. Last check: 2007-11-06)
		Home -> Archives -> Ed Bugos -> The Neutrality Of Money
		And achieving the goal of stable money, which may well result in both a fuller employment and a more nearly constant price level than would otherwise be possible, requires only that the government refrain from interfering with the commodity money chosen by the market" - Roger Garrison, The Costs of a Gold Standard.
		To the extent that each individual change in the pattern of prices can be attributed to non-monetary factors, the issue of monetary non-neutrality does not arise despite the fall in the price level -Roger Garrison The Costs of a Gold Standard
	www.safehaven.com /article-586.htm (2196 words)

	SSRN-References Cited 'The Distribution of Money Balances and the Non-Neutrality of Money' by Aleksander Berentsen, ... (Site not responding. Last check: 2007-11-06)
		SSRN-References Cited 'The Distribution of Money Balances and the Non-Neutrality of Money' by Aleksander Berentsen, Gabriele Camera, Christopher Waller
		The Distribution of Money Balances and the Non-Neutrality of Money
		Aruoba, B., C. Waller and R. Wright, "Money and Capital," mimeo, University of Pennsylvania, 2004.
	papers.ssrn.com /sol3/RefUsedIn.cfm?abid=647361 (116 words)

	Money, Method, and the Market Process
		Austrian Perspective on the History of Economic Thought (2 volume set)
		This volume might be called the Mises Reader, for it contains a wide sampling of his academic essays on money, trade, and economic systems.
		Some of them, like "Observations on the Cooperative Movement," have not been published previously.
	www.mises.org /store/Money-Method-and-the-Market-Process-P50C0.aspx (223 words)

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