A Note on the Neutrality of Temporary Monetary Disturbances
22 Pages Posted: 24 Aug 2012
Date Written: 1979
In the classical macroeconomic models constructed by Lucas (1972, 1975) and Barro (1976), monetary aggregates are assumed to be generated by a logarithmic random walk. This specification implies that all monetary growth is (a) unanticipated and (b) permanent.
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