Title: Reflections on the current state of monetary economics
Abstract: To theorists, monetary economics has long presented a challenge: finding the assumptions under which it does or does not matter. The challenge is all the greater because, while it is easy to construct models in which money matters, it is hard to believe that the quantitative effects in at least many of these are significant enough to account for observed behavior. For instance, macro–economists have often relied on the real balance effect, the fact that as prices fall, the real value of money increases, making individuals feel better off. However, for moderate rates of decline in prices, the magnitude of the real balance effect is too small to account, for instance, for an economic recovery.
Publication Year: 2003
Publication Date: 2003-09-04
Language: en
Type: book-chapter
Indexed In: ['crossref']
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot