What does neutrality of money mean?
Definitions for neutrality of money
neu·tral·i·ty of mon·ey
This dictionary definitions page includes all the possible meanings, example usage and translations of the word neutrality of money.
Wikipedia
Neutrality of money
Neutrality of money is the idea that a change in the stock of money affects only nominal variables in the economy such as prices, wages, and exchange rates, with no effect on real variables, like employment, real GDP, and real consumption. Neutrality of money is an important idea in classical economics and is related to the classical dichotomy. It implies that the central bank does not affect the real economy (e.g., the number of jobs, the size of real GDP, the amount of real investment) by creating money. Instead, any increase in the supply of money would be offset by a proportional rise in prices and wages. This assumption underlies some mainstream macroeconomic models (e.g., real business cycle models). Others like monetarism view money as being neutral only in the long-run. When neutrality of money coincides with zero population growth, the economy is said to rest in steady-state equilibrium.Superneutrality of money is a stronger property than neutrality of money. It holds that not only is the real economy unaffected by the level of the money supply but also that the rate of money supply growth has no effect on real variables. In this case, nominal wages and prices remain proportional to the nominal money supply not only in response to one-time permanent changes in the nominal money supply but also in response to permanent changes in the growth rate of the nominal money supply. Typically superneutrality is addressed in the context of long-run models.
Numerology
Chaldean Numerology
The numerical value of neutrality of money in Chaldean Numerology is: 6
Pythagorean Numerology
The numerical value of neutrality of money in Pythagorean Numerology is: 4
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"neutrality of money." Definitions.net. STANDS4 LLC, 2024. Web. 28 Apr. 2024. <https://www.definitions.net/definition/neutrality+of+money>.
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