A Review of Monetary Neutrality Literature
40 Pages Posted: 9 Jul 2020
Date Written: June 14, 2020
In this paper, I review some selected literature about or related to the monetary neutrality and show that specific aspects of the monetary (non-)neutrality are actually derived from the underlying welfare consideration and thus their validity or desirability depend on the current state and way of organising the economy. On the other hand, the spirit of the monetary neutrality, namely the success of financial innovations should be measured in the success of real business and that market is the default solution and the government only intervenes if necessary, remains unchallenged.
Keywords: Monetary Neutrality, Relative Prices
JEL Classification: B12, B13, B23, B26, B59, G21, G23, G24, G28, G29, G32
Suggested Citation: Suggested Citation