Nonneutrality of Money in Classical Monetary Thought

13 Pages Posted: 6 Nov 2012

See all articles by Thomas M. Humphrey

Thomas M. Humphrey

Federal Reserve Banks - Federal Reserve Bank of Richmond

Date Written: 1991

Abstract

Contrary to the strawman “classical” model of the textbooks, the original classical economists did not believe that money-stock changes affect only the price level and not real output and employment. Most classicals saw money as having powerful short-run real effects and perhaps some residual long-run effects as well. Concern for money’s impact on real activity strongly influenced the classicals’ views of the desirability or undesirability of monetary expansion and contraction.

Suggested Citation

Humphrey, Thomas M., Nonneutrality of Money in Classical Monetary Thought (1991). FRB Richmond Economic Review, vol. 77, no. 2, March/April 1991, pp. 3-15, Available at SSRN: https://ssrn.com/abstract=2126221

Thomas M. Humphrey (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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