Journal Article

Nonneutrality of money in classical monetary thought

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 moneys impact on real activity strongly influenced the classicals views of the desirability or undesirability of monetary expansion and contraction.

Keywords: Money theory; Economists; Economic history;

Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Economic Review

Publication Date: 1991

Volume: 77

Issue: Mar

Pages: 3-15