WHEN IS MONEY NEUTRAL UNDER FLEXIBLE EXCHANGE RATES?

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dc.contributor.author Ahtiala, Pekka -
dc.date.accessioned 2012-06-17T20:11:21Z
dc.date.available 2012-06-16 09:22:38 -
dc.date.available 2012-06-17T20:11:21Z
dc.date.issued 2008 -
dc.identifier.isbn 978-951-44-7264-0 -
dc.identifier.issn 1458-1191 -
dc.identifier.uri http://tampub.uta.fi/handle/10024/65713
dc.description.abstract The paper studies the conditions for the neutrality of money under flexible exchange rates in an extended real-wage Mundell-Fleming model, with special emphasis on the specification of the behavior functions to correspond to their foundations in closedeconomy macrotheory. It is shown that monetary expansion causes output first to decline, to eventually rise above its original level. However, if interest earnings on foreign securities dominate the trade balance in the expression for the exchange rate, monetary expansion leads to an appreciation of the exchange rate, while having an expansionary output effect. Money is neutral in the long run if either the wealth effect or foreign interest payments is abstracted from; if both are abstracted from, it is neutral also in the short run. Short and long-run neutrality results also if wealth consists only of foreign securities. The above responses hold both for net creditors and ­ with a minor qualification ­ debtors. -
dc.format.extent 27 -
dc.language.iso en -
dc.publisher Tampereen yliopisto -
dc.title WHEN IS MONEY NEUTRAL UNDER FLEXIBLE EXCHANGE RATES? -
dc.type fi=Erillisteos | en=Monograph| -
dc.identifier.urn urn:isbn:978-951-44-7264-0 -
dc.type.version fi=Kustantajan versio | en=Publisher's version| -
dc.subject.okm fi=Kansantaloustiede | en=Economics| -
dc.oldstats 475 -
dc.seriesname.electronic Tampere Economic Working Papers Net Series
dc.relation.numberinserieselectronic 65/2008

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