Munich Personal RePEc Archive

A Review of the Literature on Monetary Neutrality

Tang, Maggie May-Jean (2016): A Review of the Literature on Monetary Neutrality.

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Abstract

Long-run monetary neutrality (LRMN) is an idea expressed from the quantity theory of money, which posits that a permanent change in money stock has no real effect in the long-run. The LRMN theory is an empirical matter with regard to monetary policy, where it helps to define the monetary transmission and is able to identify the effectiveness of monetary policy by investigating the role of money in the long run. As a result, the study of LRMN has attracted great interest for a long period of time.

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