Long Run Neutrality of Money in Mexico

Frederick Wallace () and Gary L. Shelley ()
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Gary L. Shelley: Lecturer in Economics and Finance, Department of Economics, Finance, and Urban Studies, East Tennessee State University, Johnson City, Tennessee, USA

Economia Mexicana NUEVA EPOCA, 2007, vol. XVI, issue 2, pages 219-238

Abstract: The Fisher-Seater (FS) methodology is used to investigate long run money neutrality with respect to real GDP and real output in ten selected industries in Mexico. Size distortions and low power of the FS test, issues first raised by Coe and Nason (2003, 2004), are addressed using the Coe-Nason bootstrapping procedure. The evidence indicates that long run money neutrality can be rejected for real GDP and for up to five of the ten industrial sectors studied. These findings indicate that the effects of monetary policy are likely to differ across sectors even in the long run.

Keywords: money neutrality; Fisher-Seater Test; bootstrapping. (search for similar items in EconPapers)
JEL-codes: E31 E52 (search for similar items in EconPapers)
Date: 2007
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Persistent link: http://EconPapers.repec.org/RePEc:emc:ecomex:v:16:y:2007:i:2:p:219-238

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