Long Run Effects of Money on Real Consumption and Investment in the U.S

Gary L. Shelley and Frederick Wallace
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Gary L. Shelley: East Tennesee State University

Macroeconomics from University Library of Munich, Germany

Abstract: This paper tests for long run effects of money on real expenditures in the U.S. over the 1959-2002 period. Real consumption and investment expenditures, as well as their broadly defined components, are examined. We also test for effects of money on long run reallocations of consumption expenditures among durables, nondurables, and services. The time series characteristics of each variable are rigorously investigated. This is followed by application of the long run neutrality test, introduced by Fisher and Seater (1993), to each real expenditures series. Results support long run neutrality of both M2 and M3 with respect to real expenditures for all examined levels of data aggregation.

Keywords: money; neutrality; consumption; investment (search for similar items in EconPapers)
JEL-codes: E20 E52 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-04-06, Revised 2004-04-06
New Economics Papers: this item is included in nep-mac and nep-mon
Note: Type of Document - pdf; pages: 29
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https://econwpa.ub.uni-muenchen.de/econ-wp/mac/papers/0404/0404007.pdf (application/pdf)

Related works:
Working Paper: Long run effects of money on real consumption and investment in the U.S (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpma:0404007

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