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Exchange rates, prices and money: A long-run perspective

✍ Scribed by Paul De Grauwe; Marianna Grimaldi

Publisher
John Wiley and Sons
Year
2001
Tongue
English
Weight
324 KB
Volume
6
Category
Article
ISSN
1076-9307

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✦ Synopsis

Abstract

In this paper we analyse the long‐run proportionality and neutrality propositions between inflation and money growth and between exchange rate changes and money growth. Using a sample of 100 countries over a thirty‐year period we find that the evidence in favour of these propositions is weak for the low inflation countries and very strong for the high inflation countries. We propose an explanation based on productivity shocks and transaction costs. Copyright Β© 2001 John Wiley & Sons, Ltd.

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