Non-Neutral Money: A Market Process Perspective

François Facchini ()

Journal des Economistes et des Etudes Humaines, 2018, vol. 24, issue 1, 8

Abstract: This article studies the impact of a credit expansion monetary policy on output and unemployment rate. In the introduction the history of the Phillips curve and its interpretation are presented to understand why New Consensus Macroeconomics argues that monetary policy is neutral in long-run i. e. has no effect on economic activity and natural unemployment rate. This New Consensus Macroeconomics supports the independence of the Central Bank, inflation-targeting and the strategy of constrained discretion model and influences strongly the monetary policy of central bank today. The second section critics these three principles of the new consensus. It opposes free-banking to central banking system, and takes the defense of deflation to critic the inflation-targeting. Then the third section deals with long-run neutrality of monetary policy. In an Austrian Business Cycle perspective, there is neutrality of monetary only if the production structure must always return exactly to its level of before the boom. It is improbable, because the monetary policy via tax inflation and artificial variation of real interest rate has a long-run effects on the conditions of financing of entrepreneurial project and in fine all the market process dynamic.

Keywords: Phillips curve; monetary policy; Austrian-Business Cycle and entrepreneurship (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1515/jeeh-2017-0003 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Non-Neutral Money: A Market Process Perspective (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:jeehcn:v:24:y:2018:i:1:p:8:n:3

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/jeeh/html

DOI: 10.1515/jeeh-2017-0003

Access Statistics for this article

Journal des Economistes et des Etudes Humaines is currently edited by Pierre Garello

More articles in Journal des Economistes et des Etudes Humaines from De Gruyter
Bibliographic data for series maintained by Peter Golla ().